The gratutiy ceiling of Rs.10,00,000/- is for the purpose of payment of grautity and whether the entire amount is exempted under IT Act for the private sector employees? or is it only to the Govt. employees and Public Sector employees? How this is defined in the IT Act.
2 Replies
Pankaj Arora
(Learner)
(3134 Points)
Replied 05 February 2011
The full amount recd as a gratuity is exempt for government employees and 10 Lac is limit for non – government employees.
CA PARAS BAFNA
(Practising CA )
(33428 Points)
Replied 05 February 2011
1. In case of Govt employees gratuity received at the time of retirement is exempt.
2. In case of Non-Govt employees it is partially exempt on the basis of following criteria -where the payment is covered under The Payment of Gratuity Act, 1972-
1. 15 days Salary (Basic+ DA in terms of employment) x Nos of year in Service.
2. 10,00,000
3. Actual amount Received.
Which ever is minimum.
3. In case of Non-Govt employees it is partially exempt on the basis of following criteria -where the payment is not covered under The Payment of Gratuity Act, 1972-
1. 1/2 month Salary (Basic+ DA in terms of employment+Commission on Turnover Basis) x the Nos of year in Service.
2. 3,50,000
3. Actual amount Received.
Which ever is minimum.
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