M. Has retired from a private company on 30th November 2017. He was working since 16
1991. He received 2,00,000 as gratuity. His salary rude was 5,000-100-8,000-200-15.00
1st March, 2006. He was also getting D.A. 25% of Basic Salary: Calculate his exempted
(A) if he comes under Gratuity Act, (B) if he doesn't come under Gratuity Act....how can I solve this question
Menu
Income tax gratuity
Replies (3)
No tax required to paid for gratuity up to 20 Lakh.
(A) Employees Covered Under the Payment of Gratuity Act
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
(B) Employees Not Covered Under the Payment of Gratuity Act
Calculation of amount of gratuity exempted from tax :: The least of the following are exempt from tax:
-
- Last 10 month’s average salary (basic + DA)* number of years of employment* 1/2;
- Rs. 10 lakhs (the hike to Rs 20 lakhs is not applicable for employees not covered under the Payment of Gratuity Act)
- Gratuity actually received
(A) Employees Covered Under the Payment of Gratuity Act
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
(B) Employees Not Covered Under the Payment of Gratuity Act
Calculation of amount of gratuity exempted from tax :: The least of the following are exempt from tax:
-
- Last 10 month’s average salary (basic + DA)* number of years of employment* 1/2;
- Rs. 10 lakhs (the hike to Rs 20 lakhs is not applicable for employees not covered under the Payment of Gratuity Act)
- Gratuity actually received
Recent Topic
- Input tax credit under igst under insurance compan
- ITR Form to be used
- CGAS account Holder Deceased
- ITR form suggestion
- Post office KVP income.
- Free GST invoice tool I built for my practice R
- Clarification on Gratuity Exemption under Section
- GOODS AND SERVICE TAX - GSTR 1
- Correct ITR form
- Clarification required on Section 393 & Report
Related Topics
CAclubindia
