Gratuity act was enacted on 29.03.2018 for increasing it to 20 Lakhs.
Public sectors like BHEL, implemented their wage revisions effective from 01.01.2017 which includes Gratuity increase to 20 Lakhs.
The retirees between 01.01.2017 to 29.03.2018 who are eligible for wage revision have been paid Gratuity arrears after 29.03.2018 as soon as the wage revision has been settled.
Now the question is, this Gratuity arrears is taxable ?
The retirees are in mental agony, since they go straight into 30% tax bracket to pay more than 1 Lakh.
Please clarify.
regards
Srinivasan
Retired DGM from BHEL
CAclubindia
