Gratuity exemption in itr
This query is : Resolved
03 July 2015
I have received Gratuity from my previous employer. No Income tax is deducted by them. Form 26 AS shows the amount received under salary section 192 with zero tax deduction. How should I show this payment in e-filing of ITR. If I show it under salary head then tax is calculated automatically by the portal. If I dont show it, will it lead to mismatch?. Please advise the correct way for filing e-returns.How should I claim exemption ?
Please e-mail your advice to pandeatulk1968@yahoo.com
Please e-mail your advice to pandeatulk1968@yahoo.com
03 July 2015
Gratuity received while changing jobs is taxable. Exemption is available only at the time of retirement, disablement due to accident, etc. in which case exemption as per section 10(10) will be available.
06 July 2015
As I understand, gratuity is tax exempted once in career upto Rs 10 Lakh. My question was pertaining to e filing of ITR. Where should I claim exemption? Where exactly in the ITR online form?
06 July 2015
You don't need to claim need to show the exemption in the ITR separately. Include only the taxable amount in amount taxable under 'Income from Salaries'.
Gratuity exemption can be claimed more than once if you have not exhausted the limit of Rs.10 lakhs. If a per retires at 58 and receives gratuity he can claim exemption. He then takes up another job and retires at 65 and again receives gratuity. His maximum exemption limit of Rs.10 lakhs will be reduced by the amount of exemption claimed earlier.
Gratuity exemption can be claimed more than once if you have not exhausted the limit of Rs.10 lakhs. If a per retires at 58 and receives gratuity he can claim exemption. He then takes up another job and retires at 65 and again receives gratuity. His maximum exemption limit of Rs.10 lakhs will be reduced by the amount of exemption claimed earlier.
06 July 2015
Thanks Mr. Gokhale for your kind advice. Really appreciate it. You have confirmed my understanding that max Rs 10 Lakhs of gratuity is exempted.
My confusion is : form 26AS shows the gratuity amount received under section 192 which is "income from salaries" with zero TDS. Will it create descrepency in IT calculation if I dont show it in my IT? IT dept may raise it as Tax due but not paid.
My confusion is : form 26AS shows the gratuity amount received under section 192 which is "income from salaries" with zero TDS. Will it create descrepency in IT calculation if I dont show it in my IT? IT dept may raise it as Tax due but not paid.
06 July 2015
Form 26AS is just to show the amount of TDS so that really does not matter. For computation of income the salary certificate shows the amount of your salary income if the issue of computation is every raised by the ITO. So you need not worry. Compute the taxable salary after claiming exemption for gratuity and other allowances and disclose only the net taxable amount in the ITR.
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