Tax on gratuity

swapan kr. mukhopadhyay (Querist) 09 January 2017 This query is : Resolved
retired on 31.01.2010. gratuity amount Rs 1000000/ received on jul/aug 2010.during assessment/scrutiny of AY 2010-11 gratuity amount was not considered as the same was not received during AY 2010-11.But during assessment/scrutiny of AY 2011-12 an amount of Rs 650000/(Rs1000000/-Rs350000/) is being added to income.

my quarry is that as Rs650000/ was not added during AY 2010-11 as the gratuity was not received then, why it should be added during AY 2011-12 since exemption limit was enhanced from 24.05.2010 by amending the gratuity act from Rs 350000/ to 1000000/.should it not be considered on receipt basis also during 2011-12?

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Rajendra K Goyal (Expert) 09 January 2017
Discuss with local tax lawyer and in case of need go for appeal against the orders if not satisfied with the orders.

Kumar Doab (Expert) 10 January 2017
You can also post in sister website of LCI:

www.CAclubindia.com

Guest (Expert) 10 January 2017
Dear Swapan Kumar Mukhopadhyay,

Since the income on gratuity became due within one month from the date of retirement, i.e. 31.01.2010, i.e., before the close of FY 2009-10/ AY 2010-11, the tax liability fell during the financial year 2009-10/ AY 2010-11 of the income becoming due, not on the date of receipt during the AY 2011-12.

So the gratuity income of Rs.3,50,000/- only was exempt during the AY 2010-11.

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