Dear Mr Rajat Joshi
I need further clarification
suppose a employee works for a company for 6 years and attains gratuity and gets exemption upto 3.5 lakhs
and if he works for another company and works for 7 years , my question is whether he is eligible for gratuity as per rules and whether the 3.5 exemption limit is applicable on this case too or he has to pay tax on entire amount of gratuity
your response is urgently required, thanks in advance
Regards
R sudhakar
From India, Madras
7I need further clarification
suppose a employee works for a company for 6 years and attains gratuity and gets exemption upto 3.5 lakhs
and if he works for another company and works for 7 years , my question is whether he is eligible for gratuity as per rules and whether the 3.5 exemption limit is applicable on this case too or he has to pay tax on entire amount of gratuity
your response is urgently required, thanks in advance
Regards
R sudhakar
From India, Madras
Dear all,
The basic question raised is whether income from Gratuity is taxable or not?.....here I would like to clarify that amonut received as gratuity (as per the Gratuity Act.) is not tabxable upto Rs. 3,50,000/- however income received on receipted gratuity (after Investment) is fully taxable as per the Income Slab laid down under IT Act.
Some Companies consider Gratuity amount in CTC and keeping the practice to pay accumulated Gratuity as per CTC , at the time of full n final settlement of the employee though he rendered the service below than 5 years. In such case though such company labelled as Gratuity but under the IT Act it is considered as regular salary Income like other allowances and not as Gratuity, hence treated such income as taxable Income.
Regards.
From India, Pune
The basic question raised is whether income from Gratuity is taxable or not?.....here I would like to clarify that amonut received as gratuity (as per the Gratuity Act.) is not tabxable upto Rs. 3,50,000/- however income received on receipted gratuity (after Investment) is fully taxable as per the Income Slab laid down under IT Act.
Some Companies consider Gratuity amount in CTC and keeping the practice to pay accumulated Gratuity as per CTC , at the time of full n final settlement of the employee though he rendered the service below than 5 years. In such case though such company labelled as Gratuity but under the IT Act it is considered as regular salary Income like other allowances and not as Gratuity, hence treated such income as taxable Income.
Regards.
From India, Pune
Hi shankar
Tks for your reply , my question is
Suppose "A" works for ABC for 7 years and got gratuity of 5 lakhs and got exempted upto 3.5 lakhs and pays tax on 1.5 lakhs and again works for another comapny XYZ for 10 years and gets gratuity of 10 lakhs
Now my question is whether A needs to pay tax on 10 lakhs or 6.5 lakhs and who tracks whether the Grautity exemption had already been availed by an individual
REgards
R Sudhakar
From India, Madras
Tks for your reply , my question is
Suppose "A" works for ABC for 7 years and got gratuity of 5 lakhs and got exempted upto 3.5 lakhs and pays tax on 1.5 lakhs and again works for another comapny XYZ for 10 years and gets gratuity of 10 lakhs
Now my question is whether A needs to pay tax on 10 lakhs or 6.5 lakhs and who tracks whether the Grautity exemption had already been availed by an individual
REgards
R Sudhakar
From India, Madras
HI Sudhakar,
I have already posted my detailed comment on similar question on this thread only (you may refer to it). In view of your example, as you paid tax on 1.5 lakh (difference) received from your first employment, you have to have pay tax on full amount of gratuity received from all subsequent employers. As regard to tracking of Tax, you must be aware that IT department has implemented MAPPING system based on your PAN. Thus all transaction carried out through out your life are recorded at single page (your PAN). Obviously, if IT act is so clear on taxation front, they will implement system to track your income received under different head. Moreover, it will be questioned to you during Scrutiny of your return where you might have reported receipt of Gratuity.
It's better to be clear today to stay tense free future. Hoping your query is answered in full.
Balkrishna
From India, Mumbai
I have already posted my detailed comment on similar question on this thread only (you may refer to it). In view of your example, as you paid tax on 1.5 lakh (difference) received from your first employment, you have to have pay tax on full amount of gratuity received from all subsequent employers. As regard to tracking of Tax, you must be aware that IT department has implemented MAPPING system based on your PAN. Thus all transaction carried out through out your life are recorded at single page (your PAN). Obviously, if IT act is so clear on taxation front, they will implement system to track your income received under different head. Moreover, it will be questioned to you during Scrutiny of your return where you might have reported receipt of Gratuity.
It's better to be clear today to stay tense free future. Hoping your query is answered in full.
Balkrishna
From India, Mumbai
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc