Dear All,
I want to know, if a company is paying a lump-sum gratuity amount on termination of employment to the employee, then, keeping the following conditions in mind, do a company need to give exemption u/s 10 for gratuity?
1.Grauity is paid on the calculation of Monthly Gross Salary x No. of Years worked and not as per calculations under gratuity act 1972 (i.e. Basic / 26 x 15 x No. of Years worked).
2.Gratuity amount is being paid after termination of 3 years long employment not complition of 5 years.
Please let me know whether exemption u/s10 is allowed for above case or not? If yes, please let know the calculation basis and relevant law for exemption.
Thanks in advance.
Manish Aneja
CAclubindia
