Dear All,
Recently, I quit my job and got my gratuity payments. I completed 8yrs8months of service. Thus for calculation for gratuity, my eligible number of years was correctly rounded off to 9yrs.
However, when tax was computed on my gratuity for deduction at source, they considered 8yrs for calculation and NOT 9yrs.
When questioned, the reason given to me was that the gratuity laws and the income tax laws are two separate identities. The gratuity laws allow more than 6months service to be rounded off to 1yrs, however, the income tax needs a COMPLETE year.
I feel this is incorrect and against justice. Effectively, my 8months of service was neglected. However can the govt have these kind of out of sync calculation guidelines.
Any recommendations / advise/ suggestions please !!
From India, Pune
Recently, I quit my job and got my gratuity payments. I completed 8yrs8months of service. Thus for calculation for gratuity, my eligible number of years was correctly rounded off to 9yrs.
However, when tax was computed on my gratuity for deduction at source, they considered 8yrs for calculation and NOT 9yrs.
When questioned, the reason given to me was that the gratuity laws and the income tax laws are two separate identities. The gratuity laws allow more than 6months service to be rounded off to 1yrs, however, the income tax needs a COMPLETE year.
I feel this is incorrect and against justice. Effectively, my 8months of service was neglected. However can the govt have these kind of out of sync calculation guidelines.
Any recommendations / advise/ suggestions please !!
From India, Pune
732Dear Friend,
Kindly click on the following link, it will give you some required information,
https://www.citehr.com/download-list...y=Gratuity+Act
Pls let me know was this information useful,,
If not let me try out more & give information,,,,
Regards
Mohamed Sardhar
91 93831 93832
From India, Coimbatore
Thx for reply. But the documents at your link do not help.
They only talk about the process/method to calcuate the gratuity.
I am looking for detailed explanation on how to calculate the tax on the gratuity, especially on how to arrive at "completed years of service" in the tax calculation formulae when the employee has completed more than 6months in the last year of service but NOT full year. In such a situation how do we consider the last yeart of service ? 1 full year ( as we do for calculation of gratuity) or just ignore all those months ?
e.g. 8yrs 8 months -> is this 8yrs or 9yrs of completed service for TaX COMPUTATION ? ( again, not for gratuity calculation because its clear that it would be 9yrs for gratuity calculation)
From India, Pune
They only talk about the process/method to calcuate the gratuity.
I am looking for detailed explanation on how to calculate the tax on the gratuity, especially on how to arrive at "completed years of service" in the tax calculation formulae when the employee has completed more than 6months in the last year of service but NOT full year. In such a situation how do we consider the last yeart of service ? 1 full year ( as we do for calculation of gratuity) or just ignore all those months ?
e.g. 8yrs 8 months -> is this 8yrs or 9yrs of completed service for TaX COMPUTATION ? ( again, not for gratuity calculation because its clear that it would be 9yrs for gratuity calculation)
From India, Pune
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc