*JaiNitH KuMaR* (*Aspire Then Inspire* !!) (217 Points)
26 August 2012Can anyone plzzz Tell me while doing computation of grautity under head income from salaries when we should assume that the assessee is not covered in gratuity act and when to assume that he is covered under grautity act.. ?? I mean if question dose not specify anything about it...!! What it is Assumed in the most of the cases..??
Waiting for the Earliest Reply.. plzzzzzzz
Thanking You 
abhsihek srivastava
(Audit Asstt.)
(114 Points)
Replied 26 August 2012
dear jainith when question is sailent regarding covering of gratuity or not we will always assume employee is not covered by gratuity act.
CA.Saibaburao Nanduri
(Chartered Accountant)
(3847 Points)
Replied 26 August 2012
Dear Jainith Kumar !
For the purpose of exemption of gratuity under sec.10 (10) the employees are divided under three categories:
For every completed year of service or part thereof, gratuity shall be paid at the rate of fifteen days wages based on the rate of wages last drawn by the concerned employee.
The amount of gratuity as calculated above shall not exceed Rs. 10,00,000/-
Exemption shall be limited to half month salary (based on last 10 months average) for each completed year of service or Rs. 10 Lakhs whichever is less.
Where the gratuity was received in any one or more earlier previous years also and any exemption was allowed for the same, then the exemption to be allowed during the year gets reduced to the extent of exemption already allowed, the overall limit being Rs. 10 Lakhs.
Having known the conditions, cited above, you have to choose the appropriate assumption.
CAclubindia
