Question

What is the maximum amount of exemption that is allowed for gratuity if received at the time of retirementby an employee covered under Payment of Gratuity Act?

Q: Answer-What is the maximum amount of exemption that is allowed for gratuity if received at the time of reti...

Solution Gratuity is a voluntary payment made by an employer in appreciation of services rendered by the employee. In case of gratuity being received at time of retirement or death, the gratuity amount exempt is the least of the following Rs.20 lakh Actual gratuity received 15 days salary last drawn for every completed year of service or part in excess of 6 months no. of days in a month taken as 26 As such, the maximum gratuity that will be exempt is Rs.20 lakh.