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.
