Can anyone tell me the difference between Gratuity & pension,
actually I was reading IT SEC 10 then I found these two words but I was not able to differentiate.
So please tell me if any one can in detail.
Thanks.
Surya Jain (Student) (944 Points)
29 January 2009Can anyone tell me the difference between Gratuity & pension,
actually I was reading IT SEC 10 then I found these two words but I was not able to differentiate.
So please tell me if any one can in detail.
Thanks.
CMA KNVV Sri Vidya - Sri Kanth
(C.A.Final (New) ICWAI FINAL (New))
(11269 Points)
Replied 29 January 2009
GRATUITY 10 (10) : Lumpsum amount paid by employer to employee in appreciation of past services.
AS per Gratuity act 1972It is payable if emplee has rendered service for continous period of 5 yrs .
Gratuity - In case of
1. Govt Emplyee - Fully Exempt
2. Non Govt Emplyee -
a. Covered under Payment of Gratuity Act - Least of the ollowing is Exempt
1. 350000
2. Amount Actually Recd
3. 15 / 26 * Last Drawn Salary * Completed years of Service
Completed years of Service - Eg 31.5 U should consider as 32 Yrs
SAlary = BAsic + D.A.
CMA KNVV Sri Vidya - Sri Kanth
(C.A.Final (New) ICWAI FINAL (New))
(11269 Points)
Replied 29 January 2009
B. Not Covered Under Gratuity Act ---Least of the ollowing is Exempt
1. 350000
2. Amount Actually Recd
3. 15 / 30 * 10 mths Avg Salary * Completed years of Service
Completed years of Service - Eg 31.5 U should consider as 31 Yrs
SAlary = BAsic + D.A. + % of Commision
CMA KNVV Sri Vidya - Sri Kanth
(C.A.Final (New) ICWAI FINAL (New))
(11269 Points)
Replied 29 January 2009
PENSION : Amount paid to an employee by an employer after his retirement / death...
1. Commuted Pension
Govt Employee - Gratuity recd or not - Fully exempt
Non Govt Employee - Gratuity REcd - 1/3 pf pension is exempt
Gratuity not REcd - 1/2 pf pension is exempt
2. Uncommuted Pension
Govt Employee - Fully Taxable
Non Govt Employee - Fully Taxable
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