Difference between Gratuity & pension

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.

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

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