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Hardik Parikh | Answer |Ask -Follow

Tax, Mutual Fund Expert - Answered on Jul 23, 2023

Hardik Parikh is a chartered accountant with over 15 years of experience in taxation, accounting and finance.
He also holds an MBA degree from IIM-Indore.
Hardik, who began his career as an equity research analyst, founded his own advisory firm, Hardik Parikh Associates LLP, which provides a variety of financial services to clients.
He is committed to sharing his knowledge and helping others learn more about finance. He also speaks about valuation at different forums, such as study groups of the Western India Regional Council of Chartered Accountants.... more

Question by Rayees on Jul 21, 2023Hindi

Money

Hello sir, I am working in a private firm and I am getting gratuity every month as salary component so how take income tax exemption on gratuity which I am receiving every month in salary

Ans: Hello Rayees,

I understand your query about the tax exemption on the gratuity amount you're receiving as part of your monthly salary.

Gratuity is a benefit given by the employer to employees. As per the recent amendment, gratuity is now tax-exempt up to Rs 20 lakh, which is an increase from the previous limit of Rs 10 lakh. This comes under Section 10(10) of the Income Tax Act.

However, it's important to note that if an employee receives gratuity during his service, then it is fully taxable as income under the Income Tax Act, 1961. The exemption applies when the gratuity is received at the time of retirement or termination, not during the service period.

I would recommend consulting with a tax advisor or a chartered accountant to understand how this applies to your specific situation and to plan your taxes accordingly.

I hope this information is helpful to you.

Best Regards.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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I have retired from service 31st Oct-2019. My company was covered under payment of gratuity act 1972. I have received Rs 1876910/- My company has mentioned Rs 911642/- as tax exemption and the remaining amount was taxed. I have cross checked with the exemption limit using income tax gratuity tax calculator. it shows my tax exemption limit as Rs 1051895/-. My employer says you are not paid as per gratuity payment act. The company is covered under the act. I do not know other provisions of my company if any. Please advise me the method of calculation

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Question by Raghavendra - Jul 22, 2023Hindi

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Hello Sir, I have received gratuity of ra. 4.15 lakhs in FY 2022-23 upon resigning from my previous organisation, where I served for 16 years. My previous organisation had deducted TDS from the gratuity, but I beleive gratuity is tax-exempt till Rs. 20 Lakhs. Please let me know whether Iam eligible for tax exemption or not.

Ans: Hello Raghavendra,

You're absolutely right. As per the recent amendment by the Centre, the maximum limit of tax-exempt gratuity has been increased to Rs 20 lakh from the previous ceiling of Rs 10 lakh. This means that if you've received a gratuity of Rs. 4.15 lakhs in FY 2022-23, it should be completely tax-exempt.

If your previous organisation has deducted TDS on this amount, I would recommend you to consult with them or a tax consultant to rectify this. You may be able to claim a refund for the TDS deducted when you file your income tax return.

Please note that tax laws can be complex and it's always a good idea to consult with a tax professional to understand your specific situation better.

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Am salaried earning around 50k per month, apart from this am getting a remuneration of Rs. 6000/- per month under section 194J, the company says its mandatory to deduct tax of 10%. Is there any form which can be submitted, so that 10% is not deducted on monthly remuneration. Am not attracting any tax as have home loan, tution fees , investments, medical insurance and NPS.

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Asked on - Jun 15, 2025 | Answered on Jun 15, 2025

Thanks for quick reply .

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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