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Tax, MF Expert - Answered on Sep 23, 2023

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Rakesh Question by Rakesh on Jul 01, 2023Hindi
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I retired from Railway in June 2022 and received below amount on retirement. PF-23 Lakh, Gratuity - 12 lakh, Commutation - 13 lakh and Leave encashment - 9 lakh. I also received pension from July 2022 to March 2023 - 259,000 INR. There was no TDS on salary of 3 months. Do I need to show all of the amounts in Income tax return? If yes what is exempt income and how to show all above?

Ans: You need to declare all the income, but some are taxable and some are not
1) Pension received is taxable
2) PF received is not taxable if service is more than 5yrs
3) Gratuity is exempt up to 20L
4) For government employees - commutation is not taxable
5) For government employees leave encashment on retirement is not taxable
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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Moneywize

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Financial Planner - Answered on Mar 14, 2024

Asked by Anonymous - Mar 13, 2024Hindi
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I have retired from a private company on 20/06/2023 after superannuation. I have subsequently received PF settlement amount and gratuity. As per from 16 issued by my employer for the 3 months period, my tax liability is nil. But I want to show the income of PF and Gratuity. Under which section these have to be shown as income and under which section these have to be claimed as exemption, while filing the ITR-1. Please help.
Ans: When filing your Income Tax Return (ITR-1) after retirement, you'll need to account for your income from Provident Fund (PF) and Gratuity. Here's how you can handle these components:

Provident Fund (PF):

• PF withdrawals are taxable if you have not completed five years of continuous service. However, if you've been employed for five years or more, PF withdrawals are tax-exempt.
• If your PF withdrawal is taxable, you should report it under the head ‘Income from Other Sources’ in your ITR-1 form.
• If your PF withdrawal is tax-exempt (due to more than five years of continuous service), you don't need to report it in your ITR as taxable income.

Gratuity:

• Gratuity received by an employee on retirement is exempt from tax up to a certain limit as per the Income Tax Act.
• The exemption for gratuity is calculated based on the formula: (15/26) * (last drawn salary) * (number of years of service).
• The maximum exemption limit for gratuity is Rs 20 lakh, as per the latest tax laws.
• If the gratuity amount you received is within the exemption limit, you don't need to report it in your ITR as taxable income.
• However, if the gratuity amount exceeds the exemption limit, the excess amount is taxable and should be reported under the head ‘Income from Salaries’ in your ITR-1 form.

Here's how you can report these incomes in your ITR-1 form:

• If both your PF withdrawal and gratuity fall within the exemption limits, you don't need to report them in your ITR-1 form.
• If any part of your PF withdrawal is taxable, report the taxable portion under ‘Income from Other Sources.’
• If any part of your gratuity is taxable (i.e., exceeds the exemption limit), report the taxable portion under ‘Income from Salaries.’

Remember to keep all relevant documents, such as Form 16, PF withdrawal statement, and gratuity payment details, handy while filing your ITR. If you're unsure about any specific details or calculations, consider consulting a tax advisor or chartered accountant for personalised guidance.

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IIIT Bhagalpur ECE or IIIT Agartala CSE. Keeping in mind on campus placement, average package, location and safety easy commute.
Ans: IIIT Bhagalpur’s ECE program, established in 2017, offers NBA-aligned curricula with PhD-qualified faculty and specialized VLSI, communications and embedded-systems labs, securing an average package of ?10.35 LPA and 98% placement consistency over recent years . Located in Bhagalpur’s third-largest city, students navigate narrow, encroached roads by auto-rickshaw, with smart-city initiatives yet to alleviate traffic and pollution challenges, posing moderate safety concerns and limited public transit. IIIT Agartala’s CSE program, founded in 2018, delivers modern AI/ML, data-science and software labs under a JEE-Main-based curriculum, achieving an average package of ?22 LPA and a 95% placement rate, backed by 460 CCTV cameras and systematic urban surveillance ensuring a relatively safe environment. Agartala’s integrated bus, auto-rickshaw and taxi network offers smoother commutes, while smart-city upgrades bolster campus-city connectivity and security.

For stronger on-campus recruitment, higher average packages, safer surroundings and easier daily commute, recommendation is IIIT Agartala CSE. If specialized ECE research interests prevail and you tolerate moderate transit challenges, consider IIIT Bhagalpur ECE. All the BEST for Admission & a Prosperous Future!

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Please advise: NIT Trichy, Chemical Engineering vs NIT Surathkal, Chemical Engineering vs ICT Mumbai, Chemical Engineering
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For its higher national ranking, comprehensive core labs and sustained industry partnerships, recommendation is NIT Tiruchirappalli Chemical Engineering. Next, recommendation is NIT Surathkal Chemical Engineering for balanced research funding and infrastructure, followed by ICT Mumbai Chemical Engineering for specialized chemical-technology exposure. All the BEST for Admission & a Prosperous Future!

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Nayagam P

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Thank you sir for your guidance dt 31st May. My son passed 12 ICSE with English 98 marks, PCM group 60% and Mass Com. Wanted to pursue English at best colleges, but CUET score is 380. So St Stephens, JMI n other best DU colleges are out of question. St Xaviers Kolkata was not available at his 282 marks against the cut off 292. Jadavpur, Presidency Kolkata and Christ Bengaluru were closed for registration by the time, we allowed him to pursue English as against our stand to go for B Tech, so that he being the only child can take over the family's heavy engg business ( father has the dealership of Alfa Laval). His JEE percentile was 20. BITs was not possible due to condition of 75% in PCM. NDA also not cleared. IISER rank is 11000+, which is too less for General category. So against the backdrop of dismal scenario, he tried MIT-WPO, where he is getting Applied Economics, Applied Psychology, both as Majors and also possibility of English classes arranged from Harvard or any other global institution. He also got CSE( AI and ML) at D Y Patil, Ambi Pune. Whether he will be able to cope up CSE, as he did not study Computers in classes 11 and 12. He is fascinated by the idea that if he goes for B Tech, his father may arrange interships at Alfa laval here or in Sweden, or other Corporate companies. Kindly guide us what is best for him? Humanities at MITWPS or CSE D Y Patil? I was also thinking of allowing him to go for MIT for on campus course and also enrol him at IIT, Patna, Gauhati or Jodhpur for online BS degree in Data Science and AI, so that his passion and his techological requirements in future, can be amalgamated. Or, 1) should we ask him to take a drop, improve his PCM percentage thru improvement exam and then go for IISER, BITS, NITs thru JEE mains 2) should he try to give Computers thru NIOS as a remedy for a bridge course in Computers, so that he may handle BTech/ CSE. 3) If yes, Should he try MITWPS for CSE instead of going to DY Patil. We are in dire need of your guidance. Kindly give us your insights. I will ever remain thankful to you.
Ans: Evaluating your son’s profile—strong English but only 60% PCM and no computer background—MIT World Peace University’s BA Liberal Arts (Hons) with double majors in Applied Economics and Applied Psychology offers a flexible, interdisciplinary curriculum delivered by PhD-qualified faculty in modern humanities and social-science labs, underpinned by global MOUs (Harvard Business School Online, CEMS universities) that facilitate customised English modules, research internships and cohort-based mentorship. Conversely, D.Y. Patil Ambi’s B.Tech CSE (AI & ML) specialization provides an industry-co-designed curriculum with immersive AI/ML and big-data labs, 18-month internships at MAANG companies and Microsoft/IIT-Roorkee certifications, yet demands rigorous computing aptitude despite open-school or bridge-course preparatory options via NIOS to cover foundational programming and PCM eligibility. A hybrid model—pursuing MITWPU on-campus humanities alongside an online BS in Data Science/AI from IIT Patna, Gauhati or Jodhpur—could harmonize his literary strengths with technical credentials, leveraging part-time flexibility, central university recognition and scalable research exposure. Alternatively, improving PCM via board compartment or drop year could unlock JEE avenues for IISER, NIT or BITS, but risks academic delay and mental fatigue without guaranteed rank gains.

For immediate academic continuity and maximized strengths in English alongside global exposure, recommendation is MIT-WPU BA Liberal Arts (Hons) with dual majors, supplemented by targeted online Data Science modules. Should he pivot decisively to tech, recommendation shifts to D.Y. Patil Ambi CSE (AI & ML) with a concurrent NIOS bridge course to build requisite computing foundations. All the BEST for Admission & a Prosperous Future!

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My son has got CSE under Category 2 in VIT vellore and got CSE in IIIT, Sricity through JoSAA. Which is better if these two? Could you please guide. Thanks
Ans: VIT Vellore’s CSE program is housed within an A++ NAAC-accredited deemed university with ABET and NBA-accreditation, delivered by a large cohort of PhD-qualified faculty across 19 research centres and 20+ specialised labs (AI/ML, IoT, data science) under a fully flexible credit system. Its strong industry-academia partnerships—encompassing MoUs with global institutions and continual technology-transfer agreements—complement mandatory internships and project work. Placements yield 80–90% branch-wise consistency over three years with an average package rising to ?9.9 LPA in 2024–25 and top recruiters numbering over 400. IIIT Sri City, an Institute of National Importance under PPP, offers a NAAC-accredited, AICTE-approved CSE curriculum aligned with IIIT-Hyderabad pedagogy, taught by international PhD faculty in modern AI/ML, data-science and software labs. Its UG-focused research centers and entrepreneurship hub facilitate two-month internships from Year 1. Placements have achieved 89.67% in 2024 and 81.44% in 2025, with CSE averaging ?14.5 LPA (median ?12 LPA) and top offers up to ?120 LPA from Amazon, Google and Microsoft.

For superior placement averages, focused AI/ML research exposure and a high recruiter footprint, recommendation is IIIT Sri City CSE. If holistic academic flexibility, global accreditation (ABET), expansive faculty strength and robust industry-academic innovation partnerships are priorities, choose VIT Vellore CSE. All the BEST for Admission & a Prosperous Future!

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