Companies allow their employees different types of leaves like Casual Levees, Earned Leaves, Medical Leave, Gazetted Holidays, etc. Generally, the employee is allowed to either avail of these leaves or carryforward to next year. Sometimes, the employee is also allowed to encash these unutilized leavRead more
Companies allow their employees different types of leaves like Casual Levees, Earned Leaves, Medical Leave, Gazetted Holidays, etc. Generally, the employee is allowed to either avail of these leaves or carryforward to next year. Sometimes, the employee is also allowed to encash these unutilized leaves and can earn a salary against them.
If the employee is given some monetary benefit against his carry forwarded leave then it is called encashment of the leave.
The amount of leave encashment received during the tenure of service with the same employer is fully taxable and no exemption is allowed. It will be treated as party of salary and taxable under the head Income from salary.
The amount of leave encashment received during the tenure of service with the same employer is fully taxable and no exemption is allowed. It will be treated as party of salary and taxable under the head Income from salary.
Yes, You can receive the gratuity before the completion of five years. in the following condition if an employee works less than five continuous years then also he will be eligible to get the gratuity. (i). If the person has worked for 190 days continuously since the end of the 4th year of his emploRead more
Yes, You can receive the gratuity before the completion of five years. in the following condition if an employee works less than five continuous years then also he will be eligible to get the gratuity.
(i). If the person has worked for 190 days continuously since the end of the 4th year of his employment. This is applicable in the case of those who are working in underground mines or working with such organizations which work for less than 6 days a week.
(ii) In the case of employees working with other organizations, this period is 240 days.
As per the Gratuity Payment Act, Temporary staff, contract workers, etc., are also eligible for the gratuity amount subject to fulfillment of all other conditions. such as they need to complete a minimum of five years in service. The payment of gratuity Act considers Temporary staff and contract worRead more
As per the Gratuity Payment Act, Temporary staff, contract workers, etc., are also eligible for the gratuity amount subject to fulfillment of all other conditions. such as they need to complete a minimum of five years in service.
The payment of gratuity Act considers Temporary staff and contract workers as employees of an organization. but it does not recognize the ‘apprentice’ as an employee hence, the apprentice is not eligible for gratuity.
As per the Payment of Gratuity Act, Payment of gratuity is allowed only in the following situations: 1.When an employee has completed at least five years in continuous service with that employee and -Resign from the service - On superannuation (means an employee who attains the age of retirement is Read more
As per the Payment of Gratuity Act, Payment of gratuity is allowed only in the following situations:
1.When an employee has completed at least five years in continuous service with that employee and
-Resign from the service
– On superannuation (means an employee who attains the age of retirement is said to be in superannuation)
– At the time of retirement
2. On death or disablement due to accident or disease (the time limit of 5 years shall not apply in the case of death or disablement of the employee)
Note: in the following condition if an employee works less than five continuous years then also he will be eligible to get the gratuity.
(i). If the person has worked for 190 days continuously since the end of the 4th year of his employment. This is applicable in the case of those who are working in underground mines or working with such organizations which work for less than 6 days a week.
(ii) In the case of employees working with other organizations, this period is 240 days.
Taxability of Gratuity Gratuity is taxable under the income head “Salary” in the year of receipt. However, an exemption has been provided under section 10(10) of the income tax act. Following is the way of calculation of Exempted amount: Employee Covered under Payment of Gratuity Act: Amount of GraRead more
Taxability of Gratuity
Gratuity is taxable under the income head “Salary” in the year of receipt. However, an exemption has been provided under section 10(10) of the income tax act. Following is the way of calculation of Exempted amount:
Employee Covered under Payment of Gratuity Act:
Amount of Gratuity Actual Received
Rs 20 Lakh
(Number of year of service (rounded off) X Monthly Salary (Last drawn Basic salary plus DA) X15)/26
Employee not Covered under Payment of Gratuity Act:
Amount of Gratuity Actual Received
Rs 20 Lakh
[Number of year of service (excluding fraction of years) X Last 10 month’s average salary (basic + DA)/2
Gratuity received by a Government Employee:
Gratuity received by a Government employee at the time of death or retirement is fully exempt from tax. Here, Government employee includes Center/State Government employees, Employees of local Authorities and universities set up under an act of parliament or state legislature including its affiliated College but not include the employees of a statutory corporation.
What is encashment of Leave?
Companies allow their employees different types of leaves like Casual Levees, Earned Leaves, Medical Leave, Gazetted Holidays, etc. Generally, the employee is allowed to either avail of these leaves or carryforward to next year. Sometimes, the employee is also allowed to encash these unutilized leavRead more
Companies allow their employees different types of leaves like Casual Levees, Earned Leaves, Medical Leave, Gazetted Holidays, etc. Generally, the employee is allowed to either avail of these leaves or carryforward to next year. Sometimes, the employee is also allowed to encash these unutilized leaves and can earn a salary against them.
If the employee is given some monetary benefit against his carry forwarded leave then it is called encashment of the leave.
See lessIs encashment of earned leave during the service taxable ?
The amount of leave encashment received during the tenure of service with the same employer is fully taxable and no exemption is allowed. It will be treated as party of salary and taxable under the head Income from salary.
The amount of leave encashment received during the tenure of service with the same employer is fully taxable and no exemption is allowed. It will be treated as party of salary and taxable under the head Income from salary.
See lessCan I receive my gratuity before completion of Five year of service?
Yes, You can receive the gratuity before the completion of five years. in the following condition if an employee works less than five continuous years then also he will be eligible to get the gratuity. (i). If the person has worked for 190 days continuously since the end of the 4th year of his emploRead more
Yes, You can receive the gratuity before the completion of five years. in the following condition if an employee works less than five continuous years then also he will be eligible to get the gratuity.
(i). If the person has worked for 190 days continuously since the end of the 4th year of his employment. This is applicable in the case of those who are working in underground mines or working with such organizations which work for less than 6 days a week.
(ii) In the case of employees working with other organizations, this period is 240 days.
See lessCan a contractual worker or a Temporary staff is eligible to receive Gratuity amount?
As per the Gratuity Payment Act, Temporary staff, contract workers, etc., are also eligible for the gratuity amount subject to fulfillment of all other conditions. such as they need to complete a minimum of five years in service. The payment of gratuity Act considers Temporary staff and contract worRead more
As per the Gratuity Payment Act, Temporary staff, contract workers, etc., are also eligible for the gratuity amount subject to fulfillment of all other conditions. such as they need to complete a minimum of five years in service.
The payment of gratuity Act considers Temporary staff and contract workers as employees of an organization. but it does not recognize the ‘apprentice’ as an employee hence, the apprentice is not eligible for gratuity.
See lessWhen I can receive the Gratuity?
As per the Payment of Gratuity Act, Payment of gratuity is allowed only in the following situations: 1.When an employee has completed at least five years in continuous service with that employee and -Resign from the service - On superannuation (means an employee who attains the age of retirement is Read more
As per the Payment of Gratuity Act, Payment of gratuity is allowed only in the following situations:
1.When an employee has completed at least five years in continuous service with that employee and
-Resign from the service
– On superannuation (means an employee who attains the age of retirement is said to be in superannuation)
– At the time of retirement
2. On death or disablement due to accident or disease (the time limit of 5 years shall not apply in the case of death or disablement of the employee)
Note: in the following condition if an employee works less than five continuous years then also he will be eligible to get the gratuity.
(i). If the person has worked for 190 days continuously since the end of the 4th year of his employment. This is applicable in the case of those who are working in underground mines or working with such organizations which work for less than 6 days a week.
(ii) In the case of employees working with other organizations, this period is 240 days.
See lessHow Income Tax on Gratuity received at the time of retirement is calculated?
Taxability of Gratuity Gratuity is taxable under the income head “Salary” in the year of receipt. However, an exemption has been provided under section 10(10) of the income tax act. Following is the way of calculation of Exempted amount: Employee Covered under Payment of Gratuity Act: Amount of GraRead more
Taxability of Gratuity
Gratuity is taxable under the income head “Salary” in the year of receipt. However, an exemption has been provided under section 10(10) of the income tax act. Following is the way of calculation of Exempted amount:
- Gratuity received by a Government employee at the time of death or retirement is fully exempt from tax. Here, Government employee includes Center/State Government employees, Employees of local Authorities and universities set up under an act of parliament or state legislature including its affiliated College but not include the employees of a statutory corporation.
See less