Taxability of retirement benefits

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Hello everyone,

I want know what is the taxability of different retirement benefits, please explain in simple words,
1. PF
2. Grauity
Replies (10)
In simple words,

1 gratuity
If you were govt employee then gratuity full exempt at the time of retirement
If you non govt employee then two criteria
(i) your company falls under gratuity act then your criteria will be

1.actual gratuity received
2.maximum rs. 2000000
3.15/26*last drawn salary*completed years of service
For completed years of service fraction in excess of six month consider as full year
Salary = basic dalary +DA
Least of the above will exempt
Exempt will be deducted from actual gratuity received = taxable

(ii) your company doesn't fall under gratuity act
1.actual gratuity received
2.max. Rs. 1000000
3.1/2*last 10 month avg. salary *complete years of service
For completed years of service ignore fraction
Least of above is exempted
Taxable = actual gratuity received - exempted
Salary=basic salary +DA+commission

2.PF
At the time of retirement pf will received accumulated
Accumulated pf include (contributions of employees +contributions of employer + interest on employee's contributions +interest on employer's contributions)
And also there is 3 type of pf - effect at the time if retirement
(i) statutory pf - exempted
(ii) recognised pf - exempted to certain condition
(iii) unrecognized pf - employer's contribution + interes thereon taxable
Employee's contributions not taxable
Interest thereon taxable if not taxed earlier
if accumulated pf received by government employee?
Statutory pf is for govt & semi govt employee and its fully exempt if received accumulated even annual contribution of e'yer & interest also exempt and e'yee annual contribution can take deduction u/s 80c
thank u soo much sir,

I need to know one more thing.
I not sure about the amount of advance tax i have to pay. Soo i just want to pay 10k-15k in dec month as advance tax, can i do that
It's depends on your tax liability of current year.

Sec 208 advance tax liability arise if in case your tax payable exceeds 10000
Here tax payable means estimated tax liability of current year on your total income(after deducting tds)
E.g tax liability will be 12000 and tds wii be 4000 so at the time of assessment you've to pay 8000 tax which doesn't cross 10000 limit so advance tax liability will not arise
In many case of salaried person company will deduct tds so advance tax is negligible for them.

If you falls in above criteria then you've to pay advance tax upto 75% of tax liability before 15th dec
thank u soo much sir.

Mayur Patel, you have given excellent clarification for Taxability of Retirement Benefits.

Thank you, sir.
Sir,

I have to pay advance tax 75% of total tax liability
OR 75% of ( total tax liability- tds )

For example, Total tax liability is 1,00,000 , total tds is 60,000 and tds deducted till December is 40,000.
how to calculate advance tax figure for December
100000-60000=40000 tax liability
75% of 40000 =30000 is your advance tax liability


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