Gratuity received on resignation taxable or not ?

8638 views 2 replies

Hello everyone,

one of my client received gratuity from two former employers in fy 13-14 rs.400000/- on resignation.

He resigned from the job and started his own business. whether gratuity is taxable or exempt ? waiting for the views of the experts.

 

Replies (2)

1.If he is GOVT employee fully exempted.

2.if he is private employee,covered under Gratutity act, calculation has to be done as per sec10(10)(ii) 

3.if he is private employee,not covered under Gratutity act, calculation has to be done as per sec10(10)(iii) 

 

For above 2&3 max limit is 10,00,000 his life time no limit on no of employers

 

 

If he is covered under the Payment Of Gratuity Act (other than Govt Employee), than

He is exempt from tax to the extent of minimum of either of below three items;

  1. 15 day’s Salary ( 7 days per season  in case of employees of seasonal establishments )based on the salary last drawn for every completed year of service or part thereof in excess of 6 months
  2. Rs. 10,00,000 ( Rs. 3,50,000 up to 23rd May,2010)
  3. Actual Gratuity received by employee.

Thanking You

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