gratuity

Taxability of Retirement Benefits

Income Tax - On retirement, an employee normally receives certain retirement benefits namely Gratuity, Commutation of Pension, Leave Encashment, Retrenchment Compensation, Compensation on Voluntary Retirement, Payment from Provident Fund, Payment from Superannuation Fund etc. Such benefits are taxable under the head ‘Salaries’ as 'profits in...

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Income Tax treatment of Gratuity

Income Tax - Gratuity payable to government employees is fully exempt.For non government employee covered under Payment Of Gratuity Act,1972, the maximum limit for exemption is Rs 20 lakhs and for any other employees, the maximum limit of exemption is Rs 10 Lakhs....

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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. 2019-20

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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Gratuity Exemption Limit Rs. 20 lakhs – Big Relief to salaried Tax Payers

Income Tax - Before implementation of seventh Pay Commission, the ceiling under CC S (Pension) Rules, 1972 was Rs. 10 lakh which was raised to Rs. 20 lakhs by seventh Pay Commission....

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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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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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All employees except an apprentice are entitled to gratuity

This Court, while defining as to who was an employee under Section 2(e) of the Act in Arunachalam S. vs M.D. Southern Structurals reported in 2001 2 LLJ 1457 had held that all employees were entitled to gratuity except an apprentice. This ruling was ...

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Employers have to pay Interest for delayed payment of Gratuity

An employee becomes eligible for gratuity on the termination of his employment after he has rendered continuous service for not less than five years, according to Section 4(1) of the Payment of Gratuity Act, 1972. He is also entitled for interest on ...

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Amendment to Section 43B is retrospective -SC

CIT Vs. Alom Extrusions (Supreme Court of India) - Whether amendment to Section 43B (Section) of Income Tax Act,1961, enacted with effect from 1 April 2004, is retrospectively applicable? This amendment was introduced to rationalize the tax deduction of the employer's contribution to provident fund, superannuation fund, gratuity fund and such other...

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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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Andhra Pradesh Compulsory Gratuity Insurance Rules, 2011 makes Gratuity Insurance compulsory

NA - (22/06/2011) - Every employer other than an employer of an establishment belonging to, or under the control of, the Central Government or a State Government, shall subject to provisions of sub section (2) under section 4A of the Act, obtain an insurance in the manner prescribed under sub-section (4) of section 4A ...

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Recent Posts in "gratuity"

Taxability of Retirement Benefits

On retirement, an employee normally receives certain retirement benefits namely Gratuity, Commutation of Pension, Leave Encashment, Retrenchment Compensation, Compensation on Voluntary Retirement, Payment from Provident Fund, Payment from Superannuation Fund etc. Such benefits are taxable under the head ‘Salaries’ as 'profits in...

Read More
Posted Under: Income Tax | ,

Income Tax treatment of Gratuity

Gratuity payable to government employees is fully exempt.For non government employee covered under Payment Of Gratuity Act,1972, the maximum limit for exemption is Rs 20 lakhs and for any other employees, the maximum limit of exemption is Rs 10 Lakhs....

Read More
Posted Under: Income Tax | ,

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...

Read More
Posted Under: Income Tax |

Income tax benefits available to Salaried Persons for A.Y. 2019-20

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 |

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

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....

Read More
Posted Under: Income Tax |

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

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 […]...

Read More
Posted Under: Income Tax |

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....

Read More

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....

Read More

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....

Read More

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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