Gratuity, interest received from banks

Answered

Comments

1 comment

  • Avatar
    Tax Expert 1

    Dear User,

     1.Gratuity is taxed under the head Income from Salaries. Some portion of gratuity received is exempt from tax as per Section 10(10) of the Income Tax Act .

    Any gratuity received by an employee of the Central Government, State Government or local authority, on death or retirement is fully exempt from tax

    In case of private sector employees, if they are covered under the Payment of Gratuity Act, 1972, then the Gratuity is exempt from tax subject to a maximum of Rs 10 lakh or 15 days salary for each completed year of service (or part thereof)

    The calculation of the same is a bit technical.

    2.Interest received from banks under fixed deposits should be mentioned under the head "Income from other sources" in interest income.

    0
    Comment actions Permalink

Please sign in to leave a comment.