if i am getting gratuity amount after compliting 6.5 years in a pvt. ltd. company, is it taxable on not?
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Tds on gratuity
Replies (3)
Mr Amod,
Amount of Gratuity exempt from tax:
1.(A) 15/26 × Last drawn salary × No of years of completed service (If your Company is covered under Payment of Gratuity ACT)
(B) ½ × Avg Monthly Salary × No of years of completed service (Ignore 0.5 years)
(In case company is not covered under Payment of Gratuity ACT)
OR
₹10 Lakhs
Whichever is Lower
Amount of Gratuity exempt from tax:
1.(A) 15/26 × Last drawn salary × No of years of completed service (If your Company is covered under Payment of Gratuity ACT)
(B) ½ × Avg Monthly Salary × No of years of completed service (Ignore 0.5 years)
(In case company is not covered under Payment of Gratuity ACT)
OR
₹10 Lakhs
Whichever is Lower
the taxable portion of gratuity I.e. gratuity received minus the exemption will be added and grossed up with salary income.
Employer usualy will not give you exemption beacuse you are not getting it on retirement/death and you will start working further and earned gratuity there also and the exemption of 10L is one time only and if avail any exemption at this moment the same should be adjusted from gratuity that you might earned in future that is a little hard to keep track.
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