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Tax treatment on interest paid on late payment of gratuity

Tax queries 408 views 3 replies

vinodray parmar

professor

35 Points Posted on 09 September 2018

I am paid interst on late payment of gratuity. The gratuity amount is approx.Rs. 8.9 lakhs. The interst paid is Rs. 3.5 lakhs approx. My penssion income is Rs. approx Rs. 33000 per month. I am retired and my present age is 64 years completed in JUly 2018.

Will the interest paid on late payment of gratuity attract any income tax? Is it exepmpted from income tax like gratuity? Will it be treated as income from other sources and add to the total income from pension? What will be the treatment of income tax on the interest?

Is there any provision to save tax on such income?

Replies (3)

Rohit Tibrewal

Student

3193 Points Posted on 09 September 2018

Interest received on Gratuity is Taxable , TDS Need to be deducted u/s 192. and Interest Received on Gratuity Payment is Covered Under the definition of ‘interest’ under section 2(28A) of the Act.

Please check 26AS whether TDS is deducted or not on the same.

Ashwin Kumar

CA ipcc

449 Points Posted on 09 September 2018

interest recieved on gratuity should be treated as interest income and tds under sec192 should be deducted. The amount will be treated under the head income from other sources.

vinodray parmar

professor

35 Points Posted on 09 September 2018

Many many thanks for prompt reply.

What should I do if the ex-employer has not deducted TDS on interest portion? Shoul I pay on my own? When? At the end of financial year or at the end of quarter? Please guide.