Gratuity Types & Tax Exemptions

1. An Employee Covered by the "Payment of Gratuity Act": The least of the following is exempt from gratuity: 1. 15 days' salary based on salary last drawn for every completed year of service or part thereof in excess of 6 months; 2. Maximum of Rs.3,50,000; 3. Gratuity actually received. Note:

Salary of 15 days is calculated by dividing the salary last drawn by 26

2. In The Case Of any Other Employee: The least of the following is exempt from gratuity: 1. 15 days' salary based on salary last drawn for every completed year of service; 2. Maximum of Rs.3,50,000; 3. Gratuity actually received. Note 1: While calculating completed years of service, any fractionof the year will be ignored. Note 2: Salary is calculated on the basis of the average last 10 months salary preceding the month of payment.

Cyrus Paymaster

Digitally signed by Cyrus Paymaster DN: cn=Cyrus Paymaster, o=Paymaster services, ou, [email protected], c=IN Date: 2009.11.21 19:11:04 +05'30'