Taxation of Gratuity

Santosh (Querist) 23 June 2008 This query is : Resolved
Dear Seniors

Our Client is having their own Approved Gratuity Trust set up.

As per their Internal proces they pay gratuity to resignees even they have not completed the 5 years of Service.

Will such gratuity will qualify for tax exemption under section 10(10)(ii) or 10(10)(iii).

Kidnly help me out so that I can advise them.

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Guest (Expert) 23 June 2008
Is it an approved gratuity agent of the Income Tax Act 1961.

Commissioner of IT has to approve the Gratuity fund sett up. Has that happened.

If it is approved, then please go through the specific conditions, if nothing bars you to do such a thing, you can avail tax exemption.

Santosh (Querist) 23 June 2008
Thanks for your reply.

Yes it is an approved gratuity trust by Income tax.

My query is that will it be tax free whether employee has completed only 4 years.

Santosh (Querist) 24 June 2008
Dear Senior Lawyers,

Can anybody reply to my query?

Thanks in advance.

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