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Gratuity Section 10(10)

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Ritik Gupta

3 Points Posted on 23 September 2020

If an government employee during his employment recieves gratuity is it exempt or taxable?Explain with reason.why taxable or why exempt?

Replies (3)

Quick Summary

This discussion clarifies the taxability of gratuity for government employees. Gratuity is typically paid upon retirement or resignation, not during employment. Therefore, the question of whether gratuity received 'during employment' is exempt or taxable is moot, as it's not payable at that time. The exemption rules and calculation methods apply only to gratuity received at the point of cessation of employment.

jacinthamary

accountant

888 Points Posted on 23 September 2020

Calculation of amount of gratuity exempted from tax

The least of the following is exempt from tax:

Last salary (basic + DA)* number of years of employment* 15/26;

Rs. 20 lakhs (which has been hiked from Rs. 10 Lakh as per the amendment);

Gratuity Actually received

Ritik Gupta

3 Points Posted on 23 September 2020

Dear, your given provision is correct but sorry i not required the provisions and also it is not my question. i simply asked that in case of during the employment any Govt. employee recieved gratuity is it exempt?? if Yes then why?

Sagar Patel

Tax and Business Consultant

11616 Points Posted on 24 September 2020

Gratuity is payable to eligible Employee at the time of retirement or when Employee have resigned from an organisation,. During the employment gratuity is not payable.

So, there is no question of Exempt or taxable during the employment.