I changed my job in the month of July 2005 from a PSU where i as working for over 10 years. I received gratuity as terminal benefit . I also withdrew my entire PF balance with the employer, on leaving thejob. I joined another job where my PF is being deducted regularly. Thus for FY2006 i will have my Form 16 from two employers.
Please let me know
whether gratuity is exempt from tax
whether PF withdrawal is taxable.
thanks and regards
4 Replies
krunal_love
(25 Points)
Replied 18 May 2007
Gratuity exemption is available at the termination of your job. Hence you will be allowed Gratuity exemption as per the provision of I.T.Act. When next time you will ask for gratuity exemption ,it will be reduced prop'tly.
Vk Duggal
(320 Points)
Replied 18 May 2007
Withdrawl from Provident Fund will be exempt as it is withdrawn after five years of service. The provident fund should be recognised. Please refer Rule 8 of Schedule IV of Income-tax Act.
Payment of Gratuity will be exempt to the extent provided in The Act.
bnnarayana
(B.Com)
(16 Points)
Replied 22 May 2007
GRATUITY IS NOT TAXABLE IF THE AMOUNT IS LESS THAN RS.350,000/- IF THE AMOUNT EXCEEDS THIS AMOUNT THAN THE BALANCE AMOUNT IS TAXABLE.
PF WITHDRAWN IS NOT TAXABLE
bnnarayana
(B.Com)
(16 Points)
Replied 22 May 2007
GRATUITY IS NOT TAXABLE IF THE AMOUNT IS LESS THAN RS.350,000/- IF THE AMOUNT EXCEEDS THIS AMOUNT THAN THE BALANCE AMOUNT IS TAXABLE.
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