Payment of Gratuity Act 1972

Basics of Gratuity

Income Tax - This article basically will help to understand the overview of the applicability of the Payments of Gratuity Act 1972. What is Gratuity? Gratuity is a benefit that is payable under the Payment of Gratuity Act 1972. Gratuity is a sum of money paid by an employer to an employee for services rendered in the company. […]...

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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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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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How to Claim Gratuity

Income Tax - Gratuity is that part of the salary of an employee when he received to employer. When leaving job. The payment of Gratuity act, 1972.means any person employed on wages in any establishment factory,mine, oilfield, plantation, port, railway company or shop or establishment in state which 10 or more persons are employed on any day of [&helli...

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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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No plan to increase Gratuity payment from 15 days salary to 30 days

Income Tax - Whether Government is considering to increase the Gratuity payment from 15 days’ salary for each completed year to 30 days’ salary for all employees of Government sector and Private sector;...

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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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Payment of Gratuity (Amendment) Bill, 2017 introduced in Lok Sabha

Income Tax - Clause 3 of the Bill seeks to amend the provision relating to calculation of continuous service for the purpose of gratuity in case of a female employee who has been on maternity leave....

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Gratuity cannot be disallowed merely for inconsistent entries in explanation of section 143(1)(a)

Athena health Technology Pvt. Ltd. Vs DCIT (ITAT Chennai) - Deduction of gratuity is available in substantive law and it cannot be disallowed merely by reference of inconsistent entries in explanation of s. 143(1)(a) of Income Tax Act being a procedural provisions, it shall not take away right confirmed in s. 37 r/w s. 40A(7) and s. 36(1)(v)....

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Employer liable to pay simple interest @10% for non-payment of gratuity within specified period

Manager Director Vs Abhay Kumar Samantray (Orissa High Court) - Orissa High Court held that Central Government, in exercise of the powers conferred by Sub-Section (3-A) of Section 7 of the P.G. Act, 1972, vide Notification dated 01.10.1987, notified that simple interest @10% is payable for the time gratuity is not paid within the specified period....

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Employers are jointly and severally liable for payment of gratuity to employee

District Cooperative Central Bank Ltd. Vs Controlling Authority under Payment of Gratuity Act 1972 & Assistant Commissioner of Labour (Andhra Pradesh High Court) - Assessee bank was jointly and severally liable for payment of the amount of gratuity to the employee alongwith the existing employer as per the provisions of Payment of Gratuity Act...

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Leave encashment of privilege leave is part of salary: SC

Jagdish Prasad Saini Vs State of Rajasthan (Supreme Court of India) - Since the expression 'salary' included benefit of leave encashment which was nothing but salary for the unavailed leave to the credit of the employee, therefore, the condition that carry forward of balance privilege leave, was barred and requiring employees to seek encashment from their previous emp...

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Gratuity exemption u/s 10(10) available to employee holding civil post under a state

Asha Ahuja Vs ITO (ITAT Delhi) - Held that an employee holding a civil post under a state is eligible for exemption towards amount of gratuity received under section 10(10) of Income Tax Act...

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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 "Payment of Gratuity Act 1972"

Gratuity cannot be disallowed merely for inconsistent entries in explanation of section 143(1)(a)

Athena health Technology Pvt. Ltd. Vs DCIT (ITAT Chennai)

Deduction of gratuity is available in substantive law and it cannot be disallowed merely by reference of inconsistent entries in explanation of s. 143(1)(a) of Income Tax Act being a procedural provisions, it shall not take away right confirmed in s. 37 r/w s. 40A(7) and s. 36(1)(v)....

Read More

Employer liable to pay simple interest @10% for non-payment of gratuity within specified period

Manager Director Vs Abhay Kumar Samantray (Orissa High Court)

Orissa High Court held that Central Government, in exercise of the powers conferred by Sub-Section (3-A) of Section 7 of the P.G. Act, 1972, vide Notification dated 01.10.1987, notified that simple interest @10% is payable for the time gratuity is not paid within the specified period....

Read More

Employers are jointly and severally liable for payment of gratuity to employee

District Cooperative Central Bank Ltd. Vs Controlling Authority under Payment of Gratuity Act 1972 & Assistant Commissioner of Labour (Andhra Pradesh High Court)

Assessee bank was jointly and severally liable for payment of the amount of gratuity to the employee alongwith the existing employer as per the provisions of Payment of Gratuity Act...

Read More

Leave encashment of privilege leave is part of salary: SC

Jagdish Prasad Saini Vs State of Rajasthan (Supreme Court of India)

Since the expression 'salary' included benefit of leave encashment which was nothing but salary for the unavailed leave to the credit of the employee, therefore, the condition that carry forward of balance privilege leave, was barred and requiring employees to seek encashment from their previous employer was an arbitrary and unconscionabl...

Read More

Basics of Gratuity

This article basically will help to understand the overview of the applicability of the Payments of Gratuity Act 1972. What is Gratuity? Gratuity is a benefit that is payable under the Payment of Gratuity Act 1972. Gratuity is a sum of money paid by an employer to an employee for services rendered in the company. […]...

Read More
Posted Under: Corporate Law |

Gratuity exemption u/s 10(10) available to employee holding civil post under a state

Asha Ahuja Vs ITO (ITAT Delhi)

Held that an employee holding a civil post under a state is eligible for exemption towards amount of gratuity received under section 10(10) of Income Tax Act...

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Salary of employees can be included in CIRP costs: SC

Sunil Kumar Jian and Others Vs Sundaresh Bhatt and Others (Supreme Court of India)

Sunil Kumar Jian and Others Vs Sundaresh Bhatt and Others (Supreme Court) Whether the amounts of provident fund, gratuity, and pension fund should be separated from the liquidation and other rights of workmen in liquidation process The Hon’ble Supreme Court in the case of Sunil Kumar Jian and Others v. Sundaresh Bhatt and Others (decide...

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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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Gratuity allowable from period of employment till regularisation of employment

Chief Executive Officer Vs K.V. Puttaraju (Karnataka High Court)

High Court favoured an order passed by the Controlling Authority/ Appellate Authority under the Payment of Gratuity Act, 1972, which directed government bodies to pay gratuity amount claimed by former employees from the time they were employed as daily wage earners till their employment was regularised....

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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

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