sec. 10(10C) of I. Tax Act

If gratuity act applies than: (Whichever is lower)

1. Rs 350 000

2. Actual

3. Completed yr of service*15/26*Last drawn salary

If Gratuity act not applies: (Whichever is lower)

1. Rs 350 000

2. Actual

3. Yr of service (If 6M or more considard as full yr)*15/30*Avg salary of last 10 Months

Gratuity not covered u/s 10(10C). It is Covered u/s 10(10)

Tax Treatment:-

1) For Govt. Employee - Fully Exempt

2) For other than Govt. Employee

    a) If Payment of Gratuity Act 1972 Applicable

        then least of the following will be exemp

        (1) Actual Amount received

         (2) Rs. 3,50,000

          (3) 15/26 days SALARY for every completed year of job and considering   a  period of  6 months or more as a completed year

          Here SALARY means = Basic Salry+DA

   (b)  If payment of Gratuity Act 1972 not applicable

         Least of the following will be exempt

        1) Actual amount received

         2) Rs. 3,50,000

        3)  15/30 days SALARY for every completed year (Ignore Fraction)

Here SALARY Means= Average Salary for Last 10 Months, immediately preeceding the month of retirement

SALARY= Basic Salary+D.A. (If forming part of salary for Retirement Benefit)+     % Based Commission