Treatment of Gratiuty received from employer after layoff

Hi,

I lost  my job during the peak of COVID crisis in Dec 2020. My employer paid me Gratuity amount in August 2021. Now when filing for taxes for FY 2021-22, I am not sure if the gratuity amount I received is tax exempted. I was jobless for months of Dec 2020, Jan 2021 and part of Feb 2021. Not sure if I can apply for deductions under section 10(10). The amount I received is less than 3 lakhs. Interestingly the employer has not deducted TDS on the Gratuity amount . It would really help if someone can guide me on this. Thanks in advance !!

Replies (3)
Quick Summary
This discussion clarifies the taxability of gratuity received after a layoff. The user inquired about claiming deductions under Section 10(10) for gratuity received in August 2021, after losing their job in December 2020. It was confirmed that gratuity up to ₹20 lakh is tax-exempt for employees covered under the Payment of Gratuity Act, making the user's received amount eligible for exemption.

 The gratuity amount up to Rs. 20 lakh is exempt from tax for employees that are covered under the Payment of Gratuity Act. However, if you are not covered under this act, the maximum gratuity payable is capped at Rs.10 lakh.

Thank you so much for the reply. Since the amount is much less than 10 lakhs, I think I can apply for deductions under Section 10(10) for the gratuity received.

Correct...                                

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