Taxability of Gratuity, Part of Gross Salary
This query is : Resolved
08 April 2023
Hi Experts,
I want to know the taxability of Gratuity that is part of my CTC. My employer is deducting Rs. 1200 as gratuity from my monthly CTC. Will it be part of my Gross Salary for the purpose of Income Tax Calculation?
Plz advice
I want to know the taxability of Gratuity that is part of my CTC. My employer is deducting Rs. 1200 as gratuity from my monthly CTC. Will it be part of my Gross Salary for the purpose of Income Tax Calculation?
Plz advice
08 April 2023
It will not be part of gross salary for the purpose of income tax
08 April 2023
In your case, if your employer is deducting Rs. 1200 from your monthly CTC towards gratuity, it means that they are creating a gratuity fund for you. This amount will not be considered as part of your gross salary for the purpose of income tax calculation, as it is not paid to you immediately but will be paid to you upon completion of five years of continuous service with the organization.
However, if your employer pays you gratuity as a lump sum amount at the time of your retirement or resignation, then it will be taxable as per the specified exemption limit. It will be added to your income and taxed accordingly.
However, if your employer pays you gratuity as a lump sum amount at the time of your retirement or resignation, then it will be taxable as per the specified exemption limit. It will be added to your income and taxed accordingly.
08 April 2023
Thank U Sir...
My employer have a policy that if employee leave before 5 years then they paid the gratuity amount (Monthly 1200) as Ex gratia.
In this case, will it be considered in Gross Salary for the purpose of TDS Calculation? Or the provision will be same as per gratuity?
My employer have a policy that if employee leave before 5 years then they paid the gratuity amount (Monthly 1200) as Ex gratia.
In this case, will it be considered in Gross Salary for the purpose of TDS Calculation? Or the provision will be same as per gratuity?
08 April 2023
Ex-gratia payments are typically treated as separate from regular salary and are not subject to TDS (tax deducted at source) in India. This means that your employer is not required to deduct TDS on the ex-gratia amount. However, it's important to note that the tax treatment of ex-gratia payments may vary based on the specific circumstances of your employment contract and the applicable tax laws. .
Circular : No. 573, dated 21-8-1990.
Circular : No. 573, dated 21-8-1990.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Applicable TDS rate for sale of property in Nov 2024
- RCM INVOICING FROM NOV-2024
- Should I report my US salary for January, February, March in Schedule FA?
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
