Dear Friends
I have some issues to clarify and will be grateful for any help:
1. After 1997 is it mandatory that all organizations covered by the Gratuity Act follow the upper limit set by the law, ie Rs 3.5 lakhs?
2. If the written rules and regulations of the organization framed in 1998 set the upper limit of the Gratuity as (say) Rs.2.5 lakhs - the older upper limit, then is it sufficient to pay only Rs.2.5 lakhs? (Rules are like Standing Orders, right?)
3. What is the basis for calculating the daily wage as if the month consisted of 26 instead of 30 days?
Thanks
with regards
From India, Madras
I have some issues to clarify and will be grateful for any help:
1. After 1997 is it mandatory that all organizations covered by the Gratuity Act follow the upper limit set by the law, ie Rs 3.5 lakhs?
2. If the written rules and regulations of the organization framed in 1998 set the upper limit of the Gratuity as (say) Rs.2.5 lakhs - the older upper limit, then is it sufficient to pay only Rs.2.5 lakhs? (Rules are like Standing Orders, right?)
3. What is the basis for calculating the daily wage as if the month consisted of 26 instead of 30 days?
Thanks
with regards
From India, Madras
Ans. for Q3. The basis for calculation the daily wage as if the month consisted of 26 instead of 30 days is as under the following steps:
Step1: Computation of Salary:
Salary = Basic Salary + Dearness Allowance.(Salary means last drawn Salary)
Step 2:
Taxable Gratuity:
Amount received as Gratuity
Less: Exempt u/s 10(10) - least of thefollowing:
i.Actual Gratuity Amount received by the individual.
ii.15/26 x Last Drawn Salary x No. of years of completed service or part thereof in excess of six months.
iii. Notified amount (i.e) Rs.3,50,000/-
From India, Hyderabad
Step1: Computation of Salary:
Salary = Basic Salary + Dearness Allowance.(Salary means last drawn Salary)
Step 2:
Taxable Gratuity:
Amount received as Gratuity
Less: Exempt u/s 10(10) - least of thefollowing:
i.Actual Gratuity Amount received by the individual.
ii.15/26 x Last Drawn Salary x No. of years of completed service or part thereof in excess of six months.
iii. Notified amount (i.e) Rs.3,50,000/-
From India, Hyderabad
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Gratuity - Taxation Issues.docx
Payment of Gratuity Act, 1972 & The Rules.ppt
FORM - F (TN Payment of Gratuity Rules, 1973).xls