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Provision for gratuity

vidya p nambiar (student) (45 Points)

26 July 2008

please, anyone send me about provision for gratuity and its calculation

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5 Replies

Prem Kumar (Articled student--Final) (375 Points)
Replied 26 July 2008

gratuity is covered under section 10(10) of the act

TAXATION OF GRATUITY- received after retirement

It is fully exempt from tax u/s10(10)(i) if received by a central/state govt employee( BUT not statuory corpn employees)

for an "PAYMENT OF GRATUITY ACT 1972" least of the following 3 is exempt

a. 15 days last drawn salary- for every year of service(any fraction above 6 months is taken as one year)

b. amount "fixed" by central govt ie 350,000

c.actual gratuity recieved

For any other emloyee

exempt u/s10(10)(iii)

for above point a (1/2 month's) salary for every FULL year of service(fraction ignore)

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Manish Karwa (Head Finance & Accounts) (201 Points)
Replied 04 August 2008

For gratuity valuation you have to take the service of actuarial

CA Nikhil Mittal (Manager (Audit)) (77 Points)
Replied 04 August 2008

AS PER AS-15 "EMPLOYEES BENEIHTS", FOR THE PROVISION OF GRATUITY YOU HAVE TTO TAKE SERVICES OF ACTURIAL. ACTURIAL SHALL CALCULATE THE AMOUNT OF GRATUITY PROVIDED FOR THE CURRENT YEAR CONSIDRING THE AGE, NO. OF YEARS SERVIAES RENDERED, REMAINING PERIOD OF SERVICE ETC. THANKS. NIKHIL MITTAL

(Guest)

Originally posted by :Prem Kumar
"	gratuity is covered under section 10(10) of the act TAXATION OF GRATUITY- received after retirement It is fully exempt from tax u/s10(10)(i) if received by a central/state govt employee( BUT not statuory corpn employees) for an "PAYMENT OF GRATUITY ACT 1972" least of the following 3 is exempt a. 15 days last drawn salary- for every year of service(any fraction above 6 months is taken as one year) b. amount "fixed" by central govt ie 350,000 c.actual gratuity recieved For any other emloyee exempt u/s10(10)(iii) for above point a (1/2 month's) salary for every FULL year of service(fraction ignore)	"