[Section-10(10)] Exemption on Gratuity | Income Tax Act 1961 | Akash Kumar Chauhan

Section 10(10) Exemption on Gratuity Gratuity is retirement benifit which is voluntary payment. Income tax act provide some exemption on gratuity for some cases. If gratuity recived during tha service then it is fully taxable whether it is withdrawal by…

[Section-10(10)] Exemption on Gratuity | Income Tax Act 1961 | Akash Kumar Chauhan

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Section 10(10) Exemption on Gratuity

Gratuity is retirement benifit which is voluntary payment.
Income tax act provide some exemption on gratuity for some cases.

If gratuity recived during tha service then it is fully taxable whether it is withdrawal by government or non government employees.

if gratuity recived after retirement or death then there will be occur two case-

1. Recived to government employees – then it is fully exempt.

2. Recived to non government employees – the exemption is calculated in two ways-

1. Coverd under gratuity act 1972
2. Not coverd under gratuity act 1972

if coverd then least of the following will exempt

1. Gratuity Recived
2. ₹2000000
3. 15/26 × last drawn salary × completed year of service in excess of 6 month.

salary means basic + Dearness Allowance.

if coverd then least of the following will exempt

1. Gratuity Recived
2. ₹2000000
3. 15/30 × average of 10 month of salary × completed year of service.

salary means basic + Dearness Allowance(which are forming the part of retirement benifit) + percentage base commission.

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