Exempted Incomes : Section-10(10)-Sec-10(A)-Sec-10(AA)-Sec-10(B)

15.    Gratuity [Section 10(10)]

A.     Death-cum-retirement gratuity received by Government servants [Section 10(10)(i)]

Section 10(10)(i) grants exemption to gratuity received by Government employee (i.e., Central Government or State Government or local authority).

B.     Gratuity Received by a Non-Government Employee covered by Payment of Gratuity Act, 1972 [Section 10(10)(ii)]

As per section 10(10)(ii), exemption in respect of gratuity in case of employees covered by the Payment of Gratuity Act, 1972 will be lower of following :

        15 days’ salary × years of service.

        Maximum amount specified, i.e., Rs. 10,00,000.

        Gratuity actually received.