Tax on Gratuity

Gratuity is receivable at the time of retirement or on resignation from the organization after working continuously for five years. Part of this gratuity can be taxable, depending on the amount received by non government employees. Gratuity is fully exempt for "Government Employees".

This disparity is beyond ones understanding. If at all government wants to tax gratuity it should be other way round. It will discourage people looking for government services.

Its a reward which the employee gets after end of the period of employment. Employee, government or non government earns it. Most of us work for thirty or forty years thinking that its fully exempt.

Government should consider withdrawing this tax from every category of employees. more  

View all 13 comments Below 13 comments
There should be no two I-Tax slabs for the salaried people in government and private sectors, income on interest on gratuity withdrawal. more  
Lets start a petition on this. When Income tax slabs are same for both, why difference for Gratuity ? more  
after some years of Naukri Govt pays Salary from the interest of the PF we
deposit.

On Mon, Dec 10, 2018 at 11:12 AM arup ratan sit <arsitar2@gmail.com> wrote:

> now on Govt can give more and more in Terminal benefits to appease people
> and drill hole by taxing.
> they can tax on GPF withdrawl, leave encashment, communication amt of the
> Pension too
>
> On Sat, Dec 8, 2018 at 5:28 PM Pritam Sharma <support@localcirclesmail.com>
> wrote:
>
>> more  
now on Govt can give more and more in Terminal benefits to appease people
and drill hole by taxing.
they can tax on GPF withdrawl, leave encashment, communication amt of the
Pension too

On Sat, Dec 8, 2018 at 5:28 PM Pritam Sharma <support@localcirclesmail.com>
wrote:

> more  
Discussion so far on the subject is quite enlightening and informative.

I take a clue from Mathur's post. It is appropriate to say gratuity is like a recurring deposit with a bank. When such a deposit matures, the depositor gets full maturity value and no tax is paid, except on the interest earned on the deposit. Fair enough, interest is an income and Govt taxes it when it exceeds a basic limit.

Is there an element of interest accrued in gratuity or an equivalent? If yes, let the Govt charge tax only on that part and not on whole gratuity. That would be more sensible!

Lastly, disparity shown on the basis of Govt and non-Govt employees is highly unfair and beyond any logic. Can anyone think that Govt and non-Govt employees are 2 different types of Indian Citizens? Peoples reps in Parliament may have to take up the issue and bring justice. more  
Post a Comment

Related Posts

    • Why one should insist for Fixed Deposit Receipt

      As you all know now-a-days whenever we request any sort of statement / report etc. from non-banking financial companies (NBFCs) i.e. insurance, chit fund, merchant banking, stock broking service p...

      By G D Binani
      /
    • Beware of brokers

      2000 crore fraud by karvy on its customers. Sebi has banned it now. How come we only do bans and the regulators are never facing penalties and punishments for letting shit happen.

      By Aditi Jain
      /
    • Simplification of Tax Return Filing

      The income tax return filing has been made so complicated that no common man/person today is able to file her return on her own, without the help/assistance of tax professionals. Each time we have ...

      By Sujata
      /
    • Wrong TDS entry if ITR form

      Hello all, I filed my IT returns in last week of August in which by mistake I put all my bank TDS in advance tax (IT sheet of ITR form) which is not visible in IT system. It is more than the a...

      By Shashikant Kedare
      /
    • Payment of Income tax

      I have paid income tax during 2017 but later i lost my job when I enquired through phone they said no need to pay tax as there is no income. Now 2019 I am receiving a stipend from govt should I pa...

      By Barath Kanna
      /
    • Not received my Income Tax Refund for Assessment year 2019-20

      I filed my ITR by mid-July 2019 but have not received my Income Tax Refund for Assessment year 2019-20 so far. Nor have I received any intimation for any irregularity. Called up IT departmen...

      By Neeru Sood
      /
    • Pre-plan your deposits to have maximum risk coverage from Deposit Insurance

      As per available information after Madhavpura Mercantile Co-operative Bank went into liquidation in the year 2012, cases of bank depositors' whose outstanding deposits were over one lac, were not y...

      By G D Binani
      /
    • Queries wrt IPPB account

      Hello everyone, Greetings! I just came to know about IPPB account, wherein I can trasfer funds to my PPF account online. However, I am confused with the concept and...

      By Shailey Goyal
      /
    • Punjab Maharashtra CoOp Bank debacle - What next

      Most of you may be reading, listening to the news on Punjab Maharashtra Co-operative Bank’s failure and would broadly be aware as to how a co-operative bank ranking number four in the Coopera...

      By Shivaprasad Chhatre
      /
    • SCSS

      As i understand the Senior Citizen Savings scheme is for the retired and 60yrs above. The total investment allowed is Rs 15 Lakhs per individual or Rs 30 lakhs for a couple. I came to know from the...

      By Puthucode Sundaram
      /
    • Minimum Balance in Saving's Bank

      All Account holders must protest against Arbitrary fixing of Minimum Balance in Saving's Account by various banks. The Minimum Balance should not exceed more than ₹1000/(one thousand) in any a...

      By Devesh Singh
      /
Share
Enter your email & mobile number and we will send you the instructions

Note - The email can sometime gets delivered to the spam folder, so the instruction will be send to your mobile as well

Please select a Circle that you want people to invite to.
Invite to
(Maximum 500 email ids allowed.)