Gratuity 25 lakh or 20 lakh?

The Section 10(10)(i) of the Income Tax Act, 1961 exempts any gratuity received by various categories of Government employees, ranging from persons governed by the revised Pension Rules of the Central Government, holders of posts connected with defence to members of the all-India services, etc. However, the governing rules under which gratuity is payable to each category of government employee also specify the maximum gratuity amount that an eligible employee is entitled to. The 2024 Office Memorandum increases the maximum gratuity that an eligible employee can receive to Rs 25 lakhs.

The tax exemption of gratuity amount to private sector employees is governed by Section 10(10)(ii) (if covered under the Payment of Gratuity Act), and Section 10(10)(iii) (for private sector employees not covered under the Payment of Gratuity Act) of the Income-tax Act. There is no statutory cap on the quantum of gratuity that non-government employees would be entitled to. However, the amount of gratuity that would be exempt from income tax under these Section 10(10) is capped to the sums notified by the appropriate authority. The balance gratuity would be liable to income tax. Currently, gratuity is exempted up to Rs 20 lakh for all private employees, whether covered under the Payment of Gratuity Act or not. The increase in the limits of sums payable as gratuity to Government employees would not automatically increase the exemption eligibility of private employees. If the Government intends to extend the exemption to private employees, separate notification would have to be issued by the appropriate authorities.

Thank you sir...as LIC employee  how much gratuity is exempted 25 lakh or 20 lakh??

Tax exemption for LIC employees, like other private-sector employees, is subject to the condition that the gratuity amount does not exceed the prescribed limit (₹20 lakhs).

Thank you so much sir...

You are welcome...