Regarding exemption of Gratuity

198 views 5 replies

Rajat Sharma

Accountant

583 Points Joined September 2017

Sir, I am an Accountant and filed a Income tax return of an employee who was servicing with an Ltd company, Sir in the asstt year 2019_2020 the assessee has received a sum of Rs 10.00 lac on account of gratuity, but the said amount of gratuity has been calculated by the department as taxable Income, sir I want to know that how many amount of gratuity is exempt from the income Thanks

Replies (5)

KARTHIK DAMLE

ARTICLED ASSISTANT

87 Points Joined June 2013

Please refer section 10(10). sir it also depends on how you have disclosed such gratuity in ITR . do you have the proper calculation sheet for such gratuity. if that's correct it might be disclosure related error and so the department has issued notice

Kapadia Pravin

17264 Points Joined December 2018

@ Rajat
Gratuity receipt is exempt under 10(10) upto a ceiling of 10 lakhs upto 29.3.2018 and thereafter upto 20 lakhs.

Check Form 16 how much Gratuity amount ?
Check your ITR - Which ITR you filed ?

There is something wrong in filling up ITR that's why notice .

If you wish , you mail me ITR and 143(1)(a) intimation at----- pnkapadia @ gmail.com.

Rajat Sharma

Accountant

583 Points Joined September 2017

Sir with due respect I want to request you to please advise me on this matter

Kapadia Pravin

17264 Points Joined December 2018

If you wish , you mail me ITR and 143(1)(a) intimation at----- pnkapadia @ gmail.com.

Suresh Thiyagarajan

Student

3986 Points Joined July 2018

1. According to sec 10(10), gratuity will be exempted with the least of the following,
i) Last drawn salary (basic + DA)* no of years of completed service*15/26,
ii) Rs. 20 lakhs,
iii) Actual amount of gratuity received.
2. The above computation sometimes could be tricky with respect to the determination of salary amount and determination of completed years of service.
3. As explained expert above the reason for rejection of your computation could be due to showing of gratuity in the ITR or due to computation.
4. Cross verify the computation sheet and make sure you have proper documents in support of your claim of exemption u/s 10(10).
Please correct me if the above solution has an alternative view.