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Gratuity - Taxable or not

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Gulshan Kumar (Professional Accountant)   (119 Points)
Replied 15 February 2011

Gratuity Fully Exempt for retirement from govt. employee

vivekanandhan (Assistant Manager) (38 Points)
Replied 11 August 2012

if a person is consultant in a limited company and on his death is he eligible for graduity ?


if yes , is it taxable in normal rate or at what is the rate of tax?


Please clarify


CA.Saibaburao Nanduri (Chartered Accountant) (3847 Points)
Replied 11 August 2012


Death-cum-retirement gratuities received by employees of the Central Government , State Government and the members of the Defence Services are totally exempt from tax under Section10(10)(i) of the Incometax Act.

S B Mishra (Article Assistant) (40 Points)
Replied 11 August 2012

Please see the following text of income tax act 



Incomes not included in total income.

10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included

36(i) any death-cum-retirement gratuity received under the revised Pension Rules of the Central Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence services ;


So if she received Gratuity  from State Govt School or Municipality School or Central School,it will be fully exempted..

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