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Gratuity exemption limit

Tax queries 210 views 3 replies

One of my seniors retired on 30.11.2017. He received gratuatity of 10 lakhs in Dec'18 and another 10 lakhs in June 2019. Are both the amounts exempt from tax as gratuity limit has been enhanced from 29.03.2018? May kindly help.

Replies (3)

The dates are 10 lakhs received in Dec'17 and another 10 lakhs in June 2018.

As  your retirement date being 30.11.2017, you would be eligible for 10 lakhs exemption onlt.

Employees covered under payment of Gratuity Act, 1972
Sec 10 (10) (ii)
Exempt - Least of the following
1. Gratuity Received
2. Maximum sum - Re. 20,00,000
3. 15/16* Last drawn salary * no. of years
service completed and part there of in excess of 6 months.

Other employees
Sec. 10 (10) (iii)
Exempt - Least of the following
1. Gratuity Received
2. Maximum sum - Re. 20,00,000
3. 1/2 * Avg. salary * no. of years service completed.


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