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You are here: Home / Gratuity / IT Exemption on Gratuity – 20 lakhs w.e.f. 29.3.2018
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IT Exemption on Gratuity – 20 lakhs w.e.f. 29.3.2018

March 12, 2019 admin 2 Comments

IT Exemption on Gratuity – 20 lakhs w.e.f. 29.3.2018

Income tax exemption for gratuity increased from Rs.10 lakhs to 20 lakhs w.e.f. 29.3.2018

Income tax exemption for gratuity enhanced Up to Rs. 20 lakhs

Ministry of Finance has enhanced the income tax exemption for gratuity under section 10 (10) (iii) of the Income Tax Act, 1961 to Rs. 20 lakhs. Shri Santosh Kumar Gangwar, Minister of State for Labour and Employment has expressed hope that this would benefit those employees of PSUs and other employees not covered by Payment of Gratuity Act, 1972 and has thanked the Finance Minister for enhancing the exemption limit.

The ceiling of Gratuity amount under the Payment of Gratuity Act, 1972 has been raised from time to time keeping in view over-all economic condition and employers capacity to pay and the salaries of the employees, which have been increased in private sector and in PSUs.

The latest such enhancement of ceiling of gratuity was made vide Government of India Notification dated 29.03.2018 under which the gratuity amount ceiling has been increased from Rs.10 lakhs to 20 lakhs w.e.f. 29.3.2018.

Source: PIB

Related updates:

    Payment of Gratuity Act, 1972 for Employees of NVS Covered under NPS

Filed Under: Gratuity

Comments

  1. Shabir Ahmad says

    March 12, 2019 at 11:10 pm

    Encashment of leave is related to gratuity. 10 days of earned leave paid on account of LTC this amount can exempted from IT

    Reply
    • M.K.KUMAR says

      March 14, 2019 at 11:45 am

      If the encashment of leave 10 days given on LTC less than RS.2.5 lakhs it is exempted from Income-tax rules.

      Reply

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