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Exemption of Gratuity
What is the taxability of Additional Gratuity received at the time of Retirement by an employee if total Gratuity i.e Original Gratuity and Additional Gratuity is within the limits of Formula mentioned in section 10(10) of the Act.
Replies (9)
Quick Summary
It will be treated as the same way as formula of normal Gratuity received applies
@ sourav thank u
Your welcome
What if the employee retired on 31st January 2018, received Gratuity of 10 lakhs. later receives sum of 5 lakhs as Gratuity on 31st March 2021. is his exemption limit 10 lakhs or 20 lakhs. if you can please answer.
what is the reason for receipt of additional gratuity? Any specific direction by Authorities (say Court) due to which he is receiving the additional gratuity?
@ jgm
no specific direction by any authority, agreement between management and labour union regarding payment of additional gratuity at the time of retirement
no specific direction by any authority, agreement between management and labour union regarding payment of additional gratuity at the time of retirement
@ Amir Shaikh - In that case, the exemption should be available. Having said this, you could also evaluate whether the said amount can be treated as capital receipt or not
@ Hiranmayee - Can you please elaborate as to under which circumstance this situation has arisen?
@ jgm thank you very much .
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