An Individual retires from A PSU organisation receives 17 Lakhs as gratuity, total Amount shown in Form 16 is 26 Lakhs(Inclusing Gratuity) and TDS deducted on 26Lakhs.
What is the tax implication,keeping in view the new limit of 20 Lakhs?
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Gratuity
Replies (3)
apart from gratuity remaining amount I.e. rs. 9 lakhs will be taxable and if he works with PSU then I don't think 20 lakhs limit will zbe applicable on him. in case of govt employees full amount of gratuity is exempt.
ASCERTAIN THE NATURE OF 9 LAKHS (EXCLUDING 17 LAKHS ) . MOREOVER 2O LAKHS IS NOT THE MINIMUM LIMIT. AMONG THE CRITERIA, 20 LAKHS IS ONE OF THE CRITERIA
Last salary (basic + DA)* number of years of employment* 15/26;
20,00,000 (which has been hiked from Rs. 10 Lakh as per the amendment);
Gratuity Actually received
LEAST AMONG THE 3 IS EXEMPTED
Last salary (basic + DA)* number of years of employment* 15/26;
20,00,000 (which has been hiked from Rs. 10 Lakh as per the amendment);
Gratuity Actually received
LEAST AMONG THE 3 IS EXEMPTED
If gratuity received is less than Rs 20 Lakhs, the whole of the gratuity received is tax free
If gratuity received is more than Rs 20 Lakhs, the difference above Rs 20 lakhs is taxable, Rs 20 Lakhs will remain tax free.
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