I received an amount of Rs. 5,00,000/- as gratuity and exgratia payment when I quit my 27-year old job. I want to know the tax liability and other implications on this income. My last drawn salary was Rs. 11,500/- p. m. and company used to pay a bonus of 20% on full year's salary every year at the end of Financial Year. Please reply at the earliest. Thanks.
the gratuity received by you will be exempt to the extent specified u/s 10(10) of the I-T Act. the remaining amount will be taxable. the calculation of the taxable gratuity & salary income is given as below. the tax is being calculated without considering the deduction u/s 80C as no data is given by you regarding your tax savings. Is this gratuity received by in 2011-12 or 2012-13:
| Computation of Gratuity Exemption | |||||
| Least of the three is exempt | |||||
| Gratuity Received | 500000 | ||||
| Statutory Limit | 1000000 | ||||
| Half Month's Salary | 155250 | 1/2*11500*27 | |||
| Taxable Gratuity | 444750 | 600000-155250 | |||
| Taxable Bonus | 27600 | 11500*12*20% | |||
| Taxable Salary | 138000 | 11500*12 | |||
| total Salary Received | 610350 | ||||
| Less- Prof Tax | -2500 | ||||
| Taxable Salary | 607850 | ||||
| Tax Payable | 21570 | (607850-500000)*20% | |||
11,500 x 15 x 27 / 26 = 179,134
500,000 - 179,134 = 320,866 taxable.
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