Vide Notification: F.No.S-42012/1/2008-SS-II(Vol.II), S.O.1217(E), the Ministry of Labour and Employment, has notified that the gratuity limit has been increased from Rs.3.50 Lakhs to 10.00 Lakhs w.e.f 24.05.201.
1. Whether With this notification we may proceed with the IT exemption u/s 10(10) for Rs.10.00 Lakhs, if yes 2. Whether the increased limit will apply for the employees who retires on or after 24.05.2010 or even for the employees retired on or after 01.04.2010.
In my view this exemption u/s 10(10) can be given under IT Act, only w.e.f 24.05.2010 i.e for the employees who retires on or after 24.05.2010.
Any different views?
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My view is that clause (ii) and (iii) are mutually exclusive and if a company pays more than the statutory minimum i.e. 10 lakhs, then it would fall under clause (iii) and a separate notification would be required to enhance the ceiling limit under income tax act. Please refer circular no: 10772 of 1999
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