23 March 2011
Gratuity recd by Govt employees - fully exempt
For others - If employee is covered by Payment of Gratuity Act, least of the following is exempt - 1. 10 lakhs, 2. actual gratuity recd, or 3. 15/26*last drawn salary*completed yrs of service salary here means basic + dearness allowance completed yrs of service includes part of the yr in excess of 6 months
If employee is NOT covered by Payment of Gratuity Act, least of the following is exempt - 1. 10 lakhs, 2. actual gratuity recd, or 3. 1/2*average salary*completed yrs of service average salary means average of last ten months' salary immediately before month of retirement salary here means basic + dearness allowance in terms of employment + commission expressed as a % of turnover achieved by the employee completed yrs of service DOES NOT include part of the yr in excess of 6 months
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