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    deduction of Income Tax on gratuity

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    nu_lee2003

    Posts : 45

    deduction of Income Tax on gratuity

    Post by nu_lee2003 on Thu Jun 03, 2010 9:09 am

    retirement gratuity of ten lac is taxable?
    i am retired on 30-04-10
    r c srivastava lucknow

    Admin
    Admin

    Posts : 179

    Re: deduction of Income Tax on gratuity

    Post by Admin on Thu Jun 03, 2010 10:21 pm

    The exemption limit of Gratuity is regulated by Sec 10(10) of the Income Tax Act.
    Sec 10(10)(ii) reads as follows,
    " (ii) any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extent it does not exceed an amount calculated in accordance with the provisions of sub-sections (2) and (3) of section 4 of that Act"

    The limit laid down under section 4(3) of the Payment of Gratuity Act, 1972 [as amended by the Payment of Gratuity (Amendment) Act, 1998, w.r.e.f. 24-9-1997] was Rs. 3,50,000. This has now been amended to Rs. 10,00,000. The notification in this regard has been issued on 25th May, 2010.

    As per FCI's internal circular issued in 1996, the FCI DCRG Rules had been repealed and all employees brought under the Payment of Gratuity Act (except of course those who continue to be GoI employees by virtue of Sec 12A of FCI Act)

    In view of the above, Gratuity received till 24th May 2010 is exempted upto Rs.3.50 Lakhs. gratuity received on or after 25th May is exempt upto Rs.Rs.10 Lakhs. (This is applicable to all employees of FCI- CDA, IDA, Dept Labour etc)
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    nu_lee2003

    Posts : 45

    Re: deduction of Income Tax on gratuity

    Post by nu_lee2003 on Tue Jun 08, 2010 7:48 am

    sir
    my gratuity is not paid me till now though retired on 30-04-10.
    if it is received after 25th may shall it be exempted for tax.
    pl elaborate
    tx & regds
    rcs

    Admin
    Admin

    Posts : 179

    Re: deduction of Income Tax on gratuity

    Post by Admin on Fri Jun 11, 2010 12:31 pm

    The circular on taxability of Gratuity issued by Hqrs. Finance Division can be downloaded from the following link
    Gratuity Taxation circular

    nu_lee2003 wrote:sir
    my gratuity is not paid me till now though retired on 30-04-10.
    if it is received after 25th may shall it be exempted for tax.
    pl elaborate
    tx & regds
    rcs

    If payment bill has not been prepared, then exemption would be available.
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    nu_lee2003

    Posts : 45

    INCOME TAX ON 10 LACK GRATUITY !!!!!!!!!!!!!!

    Post by nu_lee2003 on Sat Jun 12, 2010 9:00 am

    I am glad to inform all members that now as per CBDT
    IT is exempted on entire amt of gratuity i.e 10 lacks.
    by the income tax deptt G O I .
    tx & regds
    r c srivastava
    b 1357 indira nagar
    lucknow
    09415087909
    email, rcsrivastava_s@indiatimes.com
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    nu_lee2003

    Posts : 45

    Re: deduction of Income Tax on gratuity

    Post by nu_lee2003 on Sun Jun 13, 2010 7:22 am

    thanks sir for valuable information. our association efforts for
    officers is admirable.

    Admin
    Admin

    Posts : 179

    Re: deduction of Income Tax on gratuity

    Post by Admin on Wed Jun 30, 2010 3:12 pm

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    nu_lee2003

    Posts : 45

    Re: deduction of Income Tax on gratuity

    Post by nu_lee2003 on Tue Jul 06, 2010 7:37 pm

    DEAR SIR
    I AM RETIRED ON 30TH APRIL 2010.
    NO GRATUITY IS BILLED ME TILL DATE.[/b]RO LKO IS SEEKING CLARIFICATION FROM HQS.NO REPLY RECEIVED.
    KINDLY ARRANGE TO SEND NECESSARY INSTRUCTIONS TO GM(U.P).
    ALL RETIRED OFFICERS ARE FACING HARDSHIP FOR PAYMENT OF GRATUITY.
    PL REQUEST SRI J. S. TULI TO INTERVEN.
    TX AND REGARDS
    RCS LKO

    Admin
    Admin

    Posts : 179

    Re: deduction of Income Tax on gratuity

    Post by Admin on Wed Jul 07, 2010 2:51 am

    ^^^
    Please indicate the date of the retirement order issued by FCI office. Also please indicate whether you are in CDA or IDA.
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    nu_lee2003

    Posts : 45

    payment of gratuity

    Post by nu_lee2003 on Wed Jul 07, 2010 8:05 am


    1-dt of retirement order no A/25/retire EI/catII/april2010.Dt. 30--4-2010
    2- I am on IDA pattern
    3-?
    rcs lko

    Admin
    Admin

    Posts : 179

    Re: deduction of Income Tax on gratuity

    Post by Admin on Thu Jul 08, 2010 12:49 am

    As per the provision of the IT Act, the tax liability vests on the date the income becomes due or is received, whichever is earlier.

    Since the retirement order was issued on 30th April, 2010, the income became due on that date itself (even if the same is yet to be disbursed) as per the tax law as applicable as on that date. Hence, the exemption would be only upto 3.50 lakhs.

    However, in the case of a person who has being relived (instead of retired) on 30th April 2010 and the retirement order is actually issued after 25.05.2010, he can claim the benefit of exemption upto 10 lakhs as the income became due only on the issue of the retirement order.

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