04 May 2009
1)Mr. A is retired from prakash pvt.ltd. details are as follows:
Current basic Rs. 30,000/- P.M. Date of joining : 01.04.1972 Date of retired : 31.03.08 No. of years completed service: 36 years & nil months Calculation of gratuity :- 30,000*15/26*36 years i.e. Rs. 6,23,077/-
My question is whether Mr. A is eligible for full amount of gratuity Rs. 6,23,077/- or not? because company is gives gratuity to Mr. A only Rs. 3,50,000/- then what about the balance part i.e. Rs.2,73,077 whether he is entitled get from company or not? pls. explain with example.
Gratuity & PF received is taxable in the hands of Mr. A?
04 May 2009
Look Mr. Prakash, The Gratuity calculation derives the amount which will be available as deduction from the amount received as Gratuity at the time of Retirement.The maximum amount that can be allowed as Deduction is Rs.3,50,000. In the given case- Mr. A will receive deduction of Rs.3,50,000 even if he has received Rs.6,23,077 as gratuity. Balance amount i.e. 2,73,077 will be taxable. The quantum of deduction depends on the amount received from the employer. If as per company rules Mr. A is entitled for Rs.3,50,000 only and if Rs.3,50,000 is the least amongst the calculation of deduction, the whole will be allowed as deduction.
04 May 2009
Mr. A is entitled to a gratuity of Rs 6,23,077 as per Gratuity Act. Howerver the Rs 350000 is the maximum amount which is exempt from tax in his hands as per Income tax. The balance is taxaable, but he will receive the entire amount as calculated by your under The gratuity Act and no employer can deny that.
05 May 2009
According to company gratuity for Mr.A is only Rs.350,000/- as per paymt.of gratuity act,1972 bt.not Rs.6,23,077/- (this type of reply i recd.from co.side.)
Why Mr.A is not getting total Rs.6,23,077/-pls.clarify the doubts & also tell me what is the right as per gratuity act.?
05 May 2009
According to company gratuity for Mr.A is only Rs.350,000/- as per paymt.of gratuity act,1972 bt.not Rs.6,23,077/- (this type of reply i recd.from co.side.)
Why Mr.A is not getting total Rs.6,23,077/-pls.clarify the doubts & also tell me what is the right as per gratuity act.?
05 May 2009
Prakash, The amount Rs.6,23,077 is the maximum amount that can be claimed as exempt. It doesnt mean that the employer should pay this much amount. let us take an example- if in the given case the employee earns Rs.10,00,000 as Gratuity. And according to our calculation Rs.6,23,077 is the amount that can be claimed as exempt. So, Rs.3,76,923 will be taxable in the hands of the employee. The company will pay that much amount only as much is allowed to be paid under the Gratuity Act.
05 May 2009
Sorry vipul i am not get it exactly, i am still confused.
In spite of i am trying to understand, according to u Mr.A will entitled to get total Rs.6,23,077/-out of Rs.3,50,000/- is exempt (as per gratuity act) & bal.Rs.2,73,077/- is taxable in the hands of Mr.A.
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