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Gratuity & leave encahement- taxability

Tax queries 293 views 7 replies
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CA CS
144 Points Posted on 17 January 2019

Dear Friends,

Pls help me on tax perspective.. I have switched the job ( 7 years of service of Ist Job).

I have received Leave enashment & Gratuity. Please let me know whether it is taxable or exempt on resignation & joining new company...

 

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On 17 January 2019 at 15:33 Report
Replies (7)
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Coaching and Practice in Tax Audit Law
4429 Points Posted on 17 January 2019
If you are carrying forward that amount in new company then its not taxable and if you are withdrawing amount then exempt upto specified limits.
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On 17 January 2019 at 15:34
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Team Lead
7558 Points Posted on 17 January 2019
leave encashment received is taxable as salary and it is included in your taxable income. no tax benefit on joining new co.
gratuity actually received is exempt by reducing least of the below:
1. avg. last 10 months salary *no of yrs of service/2
2.Rs.20 lacs
3. Gratuity actually received
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On 17 January 2019 at 15:59
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Coaching and Practice in Tax Audit Law
4429 Points Posted on 17 January 2019

Mr. giridhar then leave encashment is exempt in which scenario?

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On 17 January 2019 at 16:01
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Team Lead
7558 Points Posted on 17 January 2019
only when it is received on retirement it is exempt
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On 17 January 2019 at 16:02
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CA CS
144 Points Posted on 17 January 2019

There is some provision that if we receive during service then same is not exempt. However when we switch job & join new company, whether we can take exemption. If so, then how much.

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On 17 January 2019 at 16:36
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Team Lead
7558 Points Posted on 17 January 2019
no it is not exempt. only if recd on retirement then it is exempt
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On 17 January 2019 at 16:38
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Coaching and Practice in Tax Audit Law
4429 Points Posted on 17 January 2019

As said above only gratuity exemption you can claim leave encashment is fully taxable.

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On 17 January 2019 at 16:39


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