Relief on gratuity

Hi,

Graduity is received by the government employee at time of retirement or at the time of death is not taxable .it is tax free but it is received by the other than government employee. it is taxable as per below under section 89 (1)

if the employees are covered under Payment of Gratuity Act, 1972, exemption of the least of the following shall be given-

• 15/26 days salary of every completed year of service or part thereof in excess of 6 months
• Rs. 100000
• Amount received

**Salary for this purpose shall be last drawn and DA only

If the employees are not covered under Payment of Gratuity Act, 1972, exemption of the least of the following shall be given-

• 15/30 days salary of each completed year of service (ignoring fractions)
• Rs. 1000000
• Amount received

Salary for this purpose shall be- Basic + DA + Commission as % of sale

Basic salary shall be average salary of last 10 months preceding the month of retirement.