Dear All,
I am thinking on one issue, regarding gratuity u/sec.10(10)
one of our Director is eligible for Gratuity, presently his mothly salary is Rs.5 lakhs, if he resigns now, he is due for 7years gratuirty, he will be receiving Rs.20 lakhs approx., as per income tax rules u/sec.10(10), gratuity is exempted from Tax the least of the following.
1. 15 days salary for every completed year of service 2. Rs.10 lakhs and 3. Actual Gratuity Received.
Suppose again he joined as a Director in the same company after receiving gratuity an all other thing, against he will be worked for more than 5 year, that time he will be eligiable for gratuity agains he will get the Rs.10 lakhs exemption from tax.
i.e. Rs.10 lakhs now and after 5 years Rs.10 lakhs = Rs.20 lakhs he will be exempt from the Tax.
Wether this process is correct or not? every 5 years he will be re appoint as a Director
insteadoff receiving sigle time gratuity, if he receives for evey 5 year once it is advantage know.
Please comment on this issue.
Regards
MURAGAIAH
CAclubindia
