Is Gratuity Taxable In India?
Gratuity is a statutory retirement benefit given by employers as a token of appreciation for long-term service. While government employees enjoy full tax exemption on gratuity, private sector employees can claim exemption up to ₹20 lakhs under Section 10(10) of the Income Tax Act. The taxable portion depends on whether the organisation is covered under the Payment of Gratuity Act, 1972, the employee’s salary, and years of service. Proper understanding of gratuity rules and limits can help in financial planning, especially for retirement.
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