NUMERICALS OF TAX TREATMENT OF GRATUITY
INCOME UNDER THE HEADS OF ‘SALARIES’
- Mr.B, an employee of ABC Ltd., receives Rs.2,05,000 as gratuity. He is covered by the payment of gratuity act, 1972. He retires on Sep.10, 2019, after rendering service of 35 years and 7 months. At the time of retirement his monthly basic salary Rs.2,700 pm. Calculate the amount of gratuity chargeable to tax. (Ans: 1,48,923)
- Mr.Abdullah, an employee of PQR Ltd., receives Rs.68,000 as gratuity. He is covered by the payment of gratuity act, 1972. He retires on July 15th 2019, after rendering service of 36 years and 9 months. At the time of retirement his monthly basic salary Rs.3,200pm and DA (forming part) was Rs.1,000. Calculate the amount of gratuity chargeable to tax. (Ans: NIL)
- Mr.A, who retired from a private concern in June 2019after rendering service of 25 years, 10 months and 20 days, received gratuity Rs.1,55,000. His ten month average salary was Rs.10,000. Calculate taxable portion of gratuity. (Ans: 30,000)
- Arun an employee of ABC Ltd. Received Rs.96,000 as gratuity and not covered by the payment of gratuity act, 1972. He retires from services on 31-01-2020 after 28 years and 9months service Ltd. At the time of retirement his salary was Rs.6,300 p.m. Find out taxable gratuity (Ans: 7,800)
- Ajay working as a Manager in XYZ Ltd he retired from services on 31-12-2019 after putting 38 years of services. He Received Rs.50,000 as his gratuity and his salary is fixed at Rs.2,520 p.m. Find out taxable gratuity. (Ans: 2120)
