Voluntary Retirement Compensation

What are the limits for exemption on voluntary retirement compensation recieved by an assessee??

Replies (3)

The exempted amount shall be minimum of the following three below;

(a) 3 months salary for every completed yr of service......

(b) (salary at the time of retirement)  X  (balance months of service left before date of retirement.)

(c) 5,00,000/ -

In 1 of  the books that i follow the limits have been given in the following manner

The Exempted amount is the least of the following:-

(A) Compensation recieved

(B) Rs. 500000

(C) Maximum of the following:

       (i) 3 months salary for every completed year of service.

       (ii) (Last drawn salary) X (Balance months of service before date of retirement)

 

The Point (C) in this was confusing me. which of these format of limits do i follow??

The exempted amount shall be minimum of the following four below;

(a) 3 months salary for every completed yr of service......

(b) (salary at the time of retirement)  X  (balance months of service left before date of retirement.)

(c) 5,00,000/ -

(d) actual amount recieved............

Though nor the act nor the rules thereof specifies that it must be lower of the (b) and (c) above,,,,,,it is taken as lower of the above four only.........

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