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Income Tax -Gratuity Received by Widow

Bhagyashree Pradeep Sawant (CA) (52 Points)

01 April 2020

If gratuity received by widow is it taxable or exempt? If possible please provide specific reference to the section.

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CA KARAN SINGH (Auditor at Big 4) (622 Points)
Replied 01 April 2020

As per Sec. 10(10) of IT Act, 1961
i. Gratuity payment to Govt. Employee is fully exempt.
ii. Gratuity payment to employee covered under Payment of Bonus Act is exempt up to max. amount of Rs. 20 lakhs.
iii. Gratuity payment to other employee exempt up to max. amount of Rs. 10 lakhs.

if widow is receiving money on death of employee the same condition will apply.

But per Circular No. 573 dated 21.08.1990 if any lump sum payment made gratuitously or by compensation (other than gratuity) to a widow of an employee who dies while still in active service is fully exempt.