Gratuity

1). k retires from govt service on 1-1-2012 (1.1.2013).he was drawing a salary of 6000p.m.he was drawing da of 1200p.m.on retirement                      he receives a gratuity of 120000.he is paid monthly pension of 4200.compute taxable salary in his case for the a.y 2013-14.

ans.77400.

Computation of Taxable Salary

Basic Salary (From Apr 2012 to Dec 2012 i.e. Rs.6,000 * 9)                = Rs. 54,000

Dearness Allowance (From Apr 2012 to Dec 2012 i.e. Rs.1,200 * 9) = Rs. 10,800

Gratuity  [Any death cum retirement gratuity received by Government

Employee is fully exempt u/s 10 (10) ]                                                         =       Nil

Pension (From Jan 2013 to Mar 2013 i.e Rs. 4,200*3)                          =Rs. 12,600

                                                                                                                           -------------------

Gross Salary                                                                                                     = Rs. 77,400

Less Deduction u/s 16                                                                                             Nil

Taxable Salary                                                                                                  = Rs. 77,400                      

2). r not covered by payment of gratuity act retires on 28th feb 2013 after serving the employer company for a period of 18yrs 10 months.he was drawing a salary of 5000 upto sep 2012 and thereafter 6000 p.m. On retirement he is not in receipt of pension but gratuity of 60000 is paid.compute taxable salary in his case for thee a.y 2013-14.

ans.71400.

Computation of Taxable Salary

Basic Salary (From Apr 2012 to Sep 2012 i.e. Rs.5,000 *6)                    

 (From Oct 2012 to Feb 2013 i.e. Rs.6,000 * 5)                                                                                      = Rs. 60,000

Gratuity

[(He is not covered under Payment of Gratuity Act, 1972. The gratuity amount exempt will be the least of the following:

1. Half Month's Salary (based on Last month's Average salary       

  immediately preceding the month of retirement or death ) for

  each completed year of service. (any fraction to be ignored) 

   (5,400*18 ) / 2                                                                                                 Rs.48,600

 Note : Average Salary is computed by taking salary for

            Apr 12 to jan 13 which is

            5,000*6+6,000*4 = 54,000 / 10 months =Rs. 5,400

2. Actual amount of Gratuity received                                                            Rs. 60,000

3. Ceiling Limit                                                                                                  Rs. 10,00,0000

Thus, the amount exempted is Rs.48,600 and the amount of 

taxable gratuity is Rs. 60,000 - Rs. 48,600 = Rs.11,400  ]                                Rs.11,400

Pension (Not entitled to receive pension)                                                =              Nil

                                                                                                                              -------------------

Gross Salary                                                                                                   =        Rs. 71,400

Less Deduction u/s 16                                                                                                 Nil

Taxable Salary                                                                                               =         Rs. 71,400