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gratuity

Tax Benefits to Companies under Pay as you Go and Gratuity Trust Formation Option for Payment of Gratuity

Income Tax - This article is an attempt to create awareness amongst Indian and Multinational companies about the tax benefits available to Indian and Multinational Companies under Pay as you Go and Gratuity Trust Formation Option for Payment of Gratuity. Gratuity benefits are governed by “The Payment of Gratuity Act 1972” and paid by the C...

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Tax Treatment of Income from Salary in Brief

Income Tax - Salary is defined to include: a) Wages b) Annuity c) Pension d) Gratuity e) Fees, Commission, Perquisites, Profits in lieu of or in addition to Salary or Wages f) Advance of Salary g) Leave Encashment h) Annual accretion to the balance of Recognized Provident Fund i) Transferred balance in Recognized Provident Fund j) Contribution by Cent...

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Income tax benefits available to Salaried Persons for A.Y. 2022-23

Income Tax - Articles compiles List of benefits available to Salaried Persons for AY 2019-20 which includes 1. House Rent Allowance, Children Education Allowance, Hostel Expenditure Allowance, Transport Allowance and other allowances 2. Perquisites...

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Salary Income – Answer to Common issues

Income Tax - section 17​​ of the Income-tax Act defines the term salary. However, not going into the technical definition, generally whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as salary....

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Gratuity Payment under Social Security Code 2020 wef 01.04.2021

Income Tax - Difference Between Statutory Provisions Applicable To Companies Under Existing Payment Of Gratuity Act 1972 (Amended) & Social Security Code, 2020 To Be Effective From 01.04.2021 This article is an attempt to elaborate the difference between Statutory provisions applicable to Companies under Existing Payment of Gratuity Act 1972 (Amen...

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Enhancement of Gratuity Limit with effect from 29/03/2018

Income Tax - The Government has issued Notification the same day wherein gratuity limit has been increased from Rs.10 lakhs to Rs.20 lakhs under the Payment of Gratuity Act, 1972....

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Payment of Gratuity (Amendment) Act, 2018 brought in force on 29th March, 2018

Income Tax - Decision:The Payment of Gratuity (Amendment) Bill, 2018 has been passed by Lok Sabha on 15th March, 2018 and by the Rajya Sabha on 22nd March, 2018, has been brought in force on 29th March, 2018. Background: The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons.  The main purpose for enacting […]...

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Payment of Gratuity (Amendment) Bill, 2018 passed by Parliament

Income Tax - The Payment of Gratuity (Amendment) Bill, 2018 has been passed by parliament today. The bill ensures harmony amongst employees in the private sector and Public Sector Undertakings/Autonomous Organizations under Government who are not covered under CCS (Pension) Rules. These employees will be entitled to receive higher amount of gratuity a...

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Govt may increase Gratuity ceiling to Rs. 20 Lakh for Private Sector Employees

Income Tax - The present upper ceiling on gratuity amount under the Act is Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar. Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, w...

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Manner Of Reporting by the Auditors On Prudential Regulatory Treatment Prescribed By RBI In Respect Of Pension And Gratuity Liability Of Public Sector Banks

Income Tax - The Council of the Institute of Chartered Accountants of India at its 304th meeting held on 23rd March 2011 considered the prudential regulatory treatment prescribed by the Reserve Bank of India vide its above mentioned circular vis a vis the impact thereof on the auditor’s report since the said treatment is a departure from the require...

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Amendment enhancing exempt Gratuity Limit cannot be treated to be retrospective: SC

Krishna Gopal Tiwary & Anr. Vs Union of India (Supreme Court of India) - Krishna Gopal Tiwary & Anr. Vs Union of India (Supreme Court) What is exempt from the Income Tax Act is the amount of gratuity received under the Gratuity Act 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 the G...

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Death-cum-retirement gratuity not payable until conclusion of departmental enquiry or judicial proceedings pending

Shivagopal Vs State of U.P (Allahabad High Court) - Shivagopal Vs State of U.P (Allahabad High Court) (i) A government employee is not entitled to death cum retiral gratuity unless the conclusion of the departmental proceedings or the enquiry by the Administrative Tribunal or judicial proceedings which includes both civil and criminal. (ii) The law a...

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Teachers are Entitled to Gratuity: SC

Birla Institute of Technology Vs The State of Jharkhand & Ors. (Supreme Court of India) - In the light of the amendment made in the definition of the word 'employee' as defined in Section 2(e) of the Act by Amending Act No. 47 of 2009 with retrospective effect from 03.04.1997, the benefit of the Payment of Gratuity Act was also extended to the teachers from 03.04.1997....

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Provision for retirement benefit based on service weightage not allowable

CIT Vs M/s. Pricol Ltd. (Madras High Court) - As far as the expression 'gratuity' is concerned, there is no definition of what 'gratuity' is, even under the Payment of Gratuity Act; yet, a monetary relief to an employee at the time of his retirement or termination of service is treated as 'gratuity'....

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Gratuity Payable only if employee put in 5 years of service – HC

R.K.V. Govindaraj Vs V. Chellaiah (Madras High Court) - The first respondent filed a claim petition before the second respondent seeking payment of gratuity for the period, which he has rendered services to the petitioner's lorry transport, from 01.04.1991 to 19.04.2007, on which date he had voluntarily stopped himself from services. He claimed gratuity ...

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Gratuity exemption u/s Section 10(10)(iii) raised to ₹ 20 lakhs

Notification No. 16/2019 [S.O. 1213(E)] - (08/03/2019) - Govt increases Gratuity exemption limit u/s Section 10(10)(iii)  to ₹ 20 lakhs from existing Rs. 10 Lakh vide Notification No. 16/2019 dated 8th March, 2019....

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President assents Payment of Gratuity (Amendment) Act, 2018

NO. 12 OF 2018 - (29/03/2018) - (1) This Act may be called the Payment of Gratuity (Amendment) Act, 2018. (2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint....

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Govt notifies maximum maternity leave of 26 weeks for Gratuity

Notification No. S.O. 1421 (E) - (29/03/2018) - Central Government hereby specifies for the purposes of the said clause that the total period of maternity leave in the case of a female employee shall not exceed twenty-six weeks....

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Payment of Gratuity (Amendment) Act, 2018 applicable from 29.03.2018

Notification No. S.O. 1419(E). - (29/03/2018) - Central Government hereby appoints the 29th day of March, 2018 as the date on which Payment of Gratuity (Amendment) Act, 2018 shall come into force....

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Govt. increases maximum gratuity limit to Rs. 20 Lakhs

Notification No. S.O. 1420 (E). - (29/03/2018) - Government vide notification S.O. 1420 (E) dated 29.03.2018 increased the limit of amount of gratuity payable to an employee under sub-section (3) of section 4 of the Payment of Gratuity Act, 1972 (39 of 1972) from from the existing limit of Rs. 10 Lakh to Rs. 20 Lakhs....

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Recent Posts in "gratuity"

Tax Benefits to Companies under Pay as you Go and Gratuity Trust Formation Option for Payment of Gratuity

This article is an attempt to create awareness amongst Indian and Multinational companies about the tax benefits available to Indian and Multinational Companies under Pay as you Go and Gratuity Trust Formation Option for Payment of Gratuity. Gratuity benefits are governed by “The Payment of Gratuity Act 1972” and paid by the C...

Read More
Posted Under: Income Tax |

Amendment enhancing exempt Gratuity Limit cannot be treated to be retrospective: SC

Krishna Gopal Tiwary & Anr. Vs Union of India (Supreme Court of India)

Krishna Gopal Tiwary & Anr. Vs Union of India (Supreme Court) What is exempt from the Income Tax Act is the amount of gratuity received under the Gratuity Act 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 the Gratuity […]...

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Tax Treatment of Income from Salary in Brief

Salary is defined to include: a) Wages b) Annuity c) Pension d) Gratuity e) Fees, Commission, Perquisites, Profits in lieu of or in addition to Salary or Wages f) Advance of Salary g) Leave Encashment h) Annual accretion to the balance of Recognized Provident Fund i) Transferred balance in Recognized Provident Fund j) Contribution by Cent...

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Posted Under: Income Tax | ,

Income tax benefits available to Salaried Persons for A.Y. 2022-23

Articles compiles List of benefits available to Salaried Persons for AY 2019-20 which includes 1. House Rent Allowance, Children Education Allowance, Hostel Expenditure Allowance, Transport Allowance and other allowances 2. Perquisites...

Read More
Posted Under: Income Tax |

Salary Income – Answer to Common issues

section 17​​ of the Income-tax Act defines the term salary. However, not going into the technical definition, generally whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as salary....

Read More
Posted Under: Income Tax | ,

Gratuity Payment under Social Security Code 2020 wef 01.04.2021

Difference Between Statutory Provisions Applicable To Companies Under Existing Payment Of Gratuity Act 1972 (Amended) & Social Security Code, 2020 To Be Effective From 01.04.2021 This article is an attempt to elaborate the difference between Statutory provisions applicable to Companies under Existing Payment of Gratuity Act 1972 (Amen...

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Posted Under: Income Tax |

Salary – Tax Treatment of Gratuities

The word ‘Gratuity’, has not been defined in the Income-Tax Act, 1961(the Act). In the absence of any definition of ‘Gratuity’ in the Act, its meaning as provided in the dictionaries has to be referred to. The word ‘Gratuity’ has been variously defined in the Advanced Law Lexicon by P.R. Aiyar. The aforesaid definition is to b...

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Posted Under: Income Tax |

Procedure of Approval of Gratuity Funds under Income Tax Act,1961

Section 2(5) of the Income Tax Act, 1961 defines an ‘approved gratuity fund’ as ‘a gratuity fund which has been and continues to be approved by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner in accordance with the rules contained in Part C of the Fourth Schedule’. In order to get ...

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Posted Under: Income Tax |

Taxability of Enhanced Gratuity received after retirement

Gratuity is one of the retirement / separation dues paid to the employees. An employee becomes eligible for gratuity after rendering minimum service of 5 years in an organization (subject to certain exceptions) The exemption for gratuity from tax is covered under Sec 10(10) of income tax Act 1961. Any Gratuity received during service is [...

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Posted Under: Income Tax |

Tax Treatment – Salary Income, allowances & perquisites

Salary is chargeable to tax on due or receipt basis whichever is earlier and includes wages, annuity or pension, gratuity, fees, commission, perquisites or profits in lieu of salary, advance salary, leave encashment, etc....

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Posted Under: Income Tax |

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