Is Gratuity amount taxable?

POSTED BY Pavan Avala ON February 28, 2012 8:37 am COMMENTS (2)

Is amount received under gratuity taxable?
I heard there is a limit of Rs 10 L. Is it max gratuity amount limit or max amount that can be tax-free?

2 replies on this article “Is Gratuity amount taxable?”

  1. Dear Pavan Avala, are you going to receive some Gratuity from your prev. employer? If yes, here are the cut offs –

    minimum 5Y service is required for gratuity eligibility. 15 days Basic + DA ‘ll be given for each completed year of service.

    If the total amount thus calculated is more than 10L Rs, you w’d have to pay tax as per your slab rate only on the excess of 10L amount.

    Thanks

    Ashal

  2. Shree says:

    Hi,
    If gratuity is calculated and paid as per gratuity act , then amount maximum of Rs 10 lacs is non taxable. As per gratuity act , gratuity is paid as 15days basic salary for every one completed year of service and it is applicable if anyone completes 5 years of service .

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