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
Ans: As per the latest amendment to Gratuity act 1972, least of the following is exempt from tax:
- Actual Gratuity received
- Rs. 20,00,000 (which has been hiked from Rs. 10 Lakh as per the amendment)
- Last salary (basic + DA)* number of years of employment* 15/26
We suggest computing as per above provision and claim tax exemption.