Can anyone tell me the difference between Gratuity & pension,
actually I was reading IT SEC 10 then I found these two words but I was not able to differentiate.
So please tell me if any one can in detail.
Thanks.
3 Replies
CMA KNVV Sri Vidya - Sri Kanth
(C.A.Final (New) ICWAI FINAL (New))
(11269 Points)
Replied 29 January 2009
GRATUITY 10 (10) : Lumpsum amount paid by employer to employee in appreciation of past services.
AS per Gratuity act 1972It is payable if emplee has rendered service for continous period of 5 yrs .
Gratuity - In case of
1. Govt Emplyee - Fully Exempt
2. Non Govt Emplyee -
a. Covered under Payment of Gratuity Act - Least of the ollowing is Exempt
1. 350000
2. Amount Actually Recd
3. 15 / 26 * Last Drawn Salary * Completed years of Service
Completed years of Service - Eg 31.5 U should consider as 32 Yrs
SAlary = BAsic + D.A.
CMA KNVV Sri Vidya - Sri Kanth
(C.A.Final (New) ICWAI FINAL (New))
(11269 Points)
Replied 29 January 2009
B. Not Covered Under Gratuity Act ---Least of the ollowing is Exempt
1. 350000
2. Amount Actually Recd
3. 15 / 30 * 10 mths Avg Salary * Completed years of Service
Completed years of Service - Eg 31.5 U should consider as 31 Yrs
SAlary = BAsic + D.A. + % of Commision
CMA KNVV Sri Vidya - Sri Kanth
(C.A.Final (New) ICWAI FINAL (New))
(11269 Points)
Replied 29 January 2009
PENSION : Amount paid to an employee by an employer after his retirement / death...
1. Commuted Pension
Govt Employee - Gratuity recd or not - Fully exempt
Non Govt Employee - Gratuity REcd - 1/3 pf pension is exempt
Gratuity not REcd - 1/2 pf pension is exempt
2. Uncommuted Pension
Govt Employee - Fully Taxable
Non Govt Employee - Fully Taxable
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