Gratuity Exemption Under Section 10

Exemption when gratuity received under the payment of gratuity act 1972 gratuity act 1972 is applicable to an establishment where 10 or more employees are employed during the financial year.

Gratuity exemption under section 10. Emphasis is on the underlined words. Central state government employees. Gratuity can either be received by.

An amount equal to the least of the following will be exempt from tax. Gratuity section 10 10. Minimum of the following 1.

Exemption of death cum retirement gratuity section 10 10 gratuity is a payment made by the employer to an employee in appreciation of the past services rendered by the employee. Employees who are covered under the payment of gratuity act 1972. Of completed years of service or part thereof in excess of 6 months.

Section 10 10 iii any gratuity received. Any death cum retirement gratuity is fully exempt from tax. Section 10 10 i exemption under gratuity the gratuity received whether it is through the state or the centre that is received by a government employee are full tax exempted.

However in both the above cases according to section 10 10 gratuity is exempt upto a certain limit. Secondly section 10 10 i says that whole amount of gratuity received under the ccs pension rules is exempted. Salary last drawn number of completed years of services 15 26.

Gratuity received by an employee on his retirement is taxable under the head salary whereas gratuity received by the legal heir of the deceased employee shall be taxable under the head income from other sources. Section 10 10 ii any gratuity received. According to section 10 of the income tax act 1961 the salaried employees are entitled to enjoy the tax exemption.