NPS Retirement Gratuity- Govt.-Allows Grauty For NPS eMPLOYEES aLSO

NPS Retirement Gratuity-Govt.- Allows Grauty For NPS eMPLOYEES aLSO 

Gratuity is a benefit entered by an hand for services rendered to an organisation. For companies covered under the Gratuity Act, this benefit is paid when an hand completes five or further times of service with the employer. An hand gets gratuity when he she resigns, retires or is laid offIn case of death or disablement there's no minimal eligibilityperiod.How Gratuity is Calculated. 

 

The gratuity quantum depends upon the term of service and last drawn payment. It's calculated according to this formula Last drawn payment( introductory payment plus honey allowance) X number of completed times of service X15/26. 

 

This means if you have completed five times and seven months of service, the number of times would be considered as six times for computation of gratuity benefit. 

On the other hand, if the service period is five times and five months, for gratuity computation it'll be considered five times. 

 

An employer can still give advanced gratuity than the quantum under the specified formula. 

Maximum quantum 

For government workers,Rs. 20 lakh is the maximum quantum that can be paid as gratuity. The Seventh Pay Commission had recommended increase in the gratuity ceiling toRs. 20 lakh from the earlier position ofRs. 10 lakh. 

 Income Tax Treatment of Gratuity 

For government workers, entire quantum of gratuity entered on withdrawal or death is presently exempted from income duty. 

In case ofnon-government workers, income duty rules on gratuity are applicable depending on whether workers are covered under the Payment of Gratuity Act, 1972 or not. 

Fornon-government workers covered under the Gratuity Act, the income duty impunity on any gratuity entered is least of the following 

Maximum Quantum specified by the government which is presentlyRs. 10 lakh 

Last drawn payment X15/26 X times of service 

 factual gratuity entered 

 

For illustration, the last drawn payment( introductory plus DA) of Mr Ashish, for illustration, isRs.,000( per month) and he has worked for 25 times. The gratuity according to the formula isRs.8.65 lakh but suppose he has actually entered gratuity ofRs. 12 lakh. 

 

So for income duty computation,Rs.8.65 lakh will be considered for impunity. So Mr Ashish will pay duty onRs.3.35 lakh(Rs. 12 lakh-8.65 lakh). 

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HOW TO CALCULATE GRATUITY: INTERESTRING CALCULATION

HOW TO CALCULATE GRATUITY: INTERESTRING CALCULATION
Gratuity is a benefit received by an employee for services rendered to an organisation. For companies covered under the Gratuity Act, this benefit is paid when an employee completes five or more years of service with the employer. An employee gets gratuity when he/she resigns, retires or is laid offIn case of death or disablement there is no minimum eligibility period.How Gratuity is Calculated.
The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26.
This means if you have completed five years and seven months of service, the number of years would be considered as six years for calculation of gratuity benefit.

On the other hand, if the service period is five years and five months, for gratuity calculation it will be considered five years.

An employer can however give higher gratuity than the amount under the prescribed formula.

Maximum Amount

For government employees, Rs. 20 lakh is the maximum amount that can be paid as gratuity. The Seventh Pay Commission had recommended increase in the gratuity ceiling to Rs. 20 lakh from the earlier level of Rs. 10 lakh.

Income Tax Treatment of Gratuity

For government employees, entire amount of gratuity received on retirement or death is currently exempted from income tax.

In case of non-government employees, income tax rules on gratuity are applicable depending on whether employees are covered under the Payment of Gratuity Act, 1972 or not.

For non-government employees covered under the Gratuity Act, the income tax exemption on any gratuity received is least of the following:

Maximum amount specified by the government which is currently Rs. 10 lakh

Last drawn salary X 15/26 X years of service
Actual gratuity received
For example, the last drawn salary (basic plus DA) of Mr Ashish, for example, is Rs. 60,000 (per month) and he has worked for 25 years. The gratuity according to the formula is Rs. 8.65 lakh but suppose he has actually received gratuity of Rs. 12 lakh.

So for income tax calculation, Rs. 8.65 lakh will be considered for exemption. So Mr Ashish will pay tax on Rs. 3.35 lakh (Rs. 12 lakh - 8.65 lakh).

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HOW TO CALCULATE GRATUITY END OF SERVICE : ONLINE CALCULATER : CALCULATE YOUR GRATUITY

HOW TO CALCULATE GRATUITY END OF SERVICE : ONLINE CALCULATER : CALCULATE YOUR GRATUITY

The Central Government has given big gifts to private and public sector employees. Like central government employees, the private and PSU employees have also been paid taxpayer gratuity up to Rs 20 lakh. So far, this limit was Rs 10 lakh. For this, the government will soon introduce a bill in Parliament.

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HOW TO CALCULATE GRATUITY END OF SERVICE : ONLINE CALCULATER : CALCULATE YOUR GRATUITY

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 HOW TO CALCULATE GRATUITY END OF THE SERVICE ONLINE CALCULATOR CALCULATE YOUR GRATUITY 

The Central Government has given big gifts to private and public sector workers. Like central government workers, the private and PSU workers have also been paid taxpayer gratuity up to Rs 20 lakh. So far, this limit was been Rs 10 lakh. For this, the government will be soon introduce a bill in Parliament. 

This government decision will profit about 50 million people who work in private and public sector. The seventh pay structure commissioned by centrally workers recommended raising the limit of gratuity to Rs 20 lakh. On the base of which the government and some state government workers have been applied for. 

How Gratuity is Calculated 

 The gratuity quantum depends upon the term of service and last drawn payment. It's calculated according to this formula Last drawn payment( introductory payment plus honey allowance) X number of completed times of service X15/26. 

 According to this formula, the time period of over six months or further is considered as one time.

 This means if you have completed five times and seven months of service, the number of times would be considered as six times for computation of gratuity benefit. 

 On the other hand, if the service period is five times and five months, for gratuity computation it'll be considered five times.

 An employer can still give advanced gratuity than the quantum under the specified formula. 

 

 Maximum quantum

 For government workers,Rs. 20 lakh is the maximum quantum that can be paid as gratuity. The Seventh Pay Commission had recommended increase in the gratuity ceiling toRs. 20 lakh from the earlier position ofRs. 10 lakh. 

 The rule applies to these associations

 According to a statement issued by the government, the Gratuity Payments Act( 1972) applies to the association wherein 10 or further workers work. The main purpose of which is to give fiscal security after the withdrawal of the workers. frequently, indeed before the listed time limit for hand withdrawal, disability or else will be retired for any other reason. In turn, gratuity can be the main source of income. 

 

 This is how Gratuity is calculated 

 According to law, if an hand works continuously for at least five times in any association, also the company has to pay a gratuity to it. For every time service, the company has to pay the same quantum as 15 days of the final pay envelope. 

 payment means Basics Salary, Dearness Allowance and Commissions etc. It's included. piecemeal from this, if a person works for further than 6 months also his gratuity is considered to be a full time. For illustration, if a person works continuously for 7 times and 6 months, gratuity will be paid for 8 times.

 One month work is counted as 26 days for gratuity computations. For calculating 15- day stipend, the yearly payment is multiplied by 15 by 26 divided by 26. This number is multiplied by the number of times of service and the quantum that comes by is paid in gratuity form. 

 

 If the hand dies

 still, also this doesn't apply to the minimal 5 time rule, If an hand dies before serving five times. The remaining wheel has to pay the hand's legal race to the company. This is to be done within 30 days of each paid hand's final workday. If the payment is for further than 30 days also the interest is to be paid on that quantum according to the law. 

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HOW TO CALCULATE GRATUITY: INTERESTRING CALCULATION

HOW TO CALCULATE GRATUITY: INTERESTRING CALCULATION

Gratuity is a benefit received by an employee for services rendered to an organisation. For companies covered under the Gratuity Act, this benefit is paid when an employee completes five or more years of service with the employer. An employee gets gratuity when he/she resigns, retires or is laid off.

In case of death or disablement there is no minimum eligibility period.

How Gratuity is Calculated
The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26.

According to this formula, the time period of over six months or more is considered as one year.

This means if you have completed five years and seven months of service, the number of years would be considered as six years for calculation of gratuity benefit.

On the other hand, if the service period is five years and five months, for gratuity calculation it will be considered five years.

An employer can however give higher gratuity than the amount under the prescribed formula.

Maximum Amount

For government employees, Rs. 20 lakh is the maximum amount that can be paid as gratuity. The Seventh Pay Commission had recommended increase in the gratuity ceiling to Rs. 20 lakh from the earlier level of Rs. 10 lakh.

Income Tax Treatment of Gratuity
For government employees, entire amount of gratuity received on retirement or death is currently exempted from income tax.

In case of non-government employees, income tax rules on gratuity are applicable depending on whether employees are covered under the Payment of Gratuity Act, 1972 or not.

For non-government employees covered under the Gratuity Act, the income tax exemption on any gratuity received is least of the following:
Maximum amount specified by the government which is currently Rs. 10 lakh
Last drawn salary X 15/26 X years of service
Actual gratuity received
For example, the last drawn salary (basic plus DA) of Mr Ashish, for example, is Rs. 60,000 (per month) and he has worked for 25 years. The gratuity according to the formula is Rs. 8.65 lakh but suppose he has actually received gratuity of Rs. 12 lakh.

So for income tax calculation, Rs. 8.65 lakh will be considered for exemption. So Mr Ashish will pay tax on Rs. 3.35 lakh (Rs. 12 lakh - 8.65 lakh).

For non-government employees not covered under the Payment of Gratuity Act, the income tax exemption on any gratuity received is least of the following:
Half month's average salary for each completed year of service
Maximum amount specified by the government which is currently Rs. 10 lakh
Actual gratuity received
(Average monthly salary is to be computed on the basis of average of salary for 10 months immediately preceding the month (not the day) of retirement)

For example, the last drawn salary (basic plus DA) of Mr Bhupesh, for example, is Rs. 70,000 and he has worked for 35 years. The gratuity according to the formula is Rs. 12.25 lakh and he has received this amount as gratuity. For tax purposes, Rs. 10 lakh would be considered as exemption limit as it is the lowest of the three factors. So Mr Bhupesh will have to pay tax on Rs. 2.25 lakh (Rs. 12.25 lakh - Rs. 10 lakh).

HOW TO CALCULATE GRATUITY: INTERESTRING CALCULATION

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