i hv 1 query plz reply ..
if employee take vrs after 25 yrs of service and balance service period is 7 years .. he receives compensation as follows
a. gratuity 600000
less exempt us 10 Rs. 200000
b. exgratia Rs. 2000000
how to compute taxable salary & how to calculate relief us 89 ???
plz reply
FOR VRS COMPENSATION EXEMPTION UNDER 89 FOLLOWING PROCEDURE TO BE FOLLOWED.
1. CALCULATE TOTAL INCOME INCLUDING COMPENSATION EXGRATIA AND CALCULATE TAX.
2.DIVIDE TOTAL COMPENSATION AS 1/3RD AND ADD TO TOTAL INCOME OF LAST THREE YEARS CALCULATE TAX FOR LAST THREE YEARS.
3. NOW CALCULATE TAX DIVIDED BY TOTAL INCOME FOR EACH YEAR YOU WILL GET PERCENTAGE .
4 CALCULATE AVERAGE OF PERCENTAGE FOR THREE YEARS( /3).
5. APPLY RATE ON COMPENSATION.
6. DEDUCT TAX IN 5 FROM STEP 1
7.TAX RELIEF
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