Whether service tax is applicable on gratuity amount and if so when was the same implemented?



I have completed 7.5 years of services, want to know how is the gratuity amount calculated and how is the tax part claculated, if applicable.

Whether service tax is applicable on gratuity amount and if so when was the same implemented?
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3 Replies to “Whether service tax is applicable on gratuity amount and if so when was the same implemented?”


  1. Service tax is not applicable on gratuity .

    Gratuity covered under the Gratuity Act
    For the Gratuity covered by the Gratuity Act, total of gratuity received by an employee from various employers in whole of service is exempt from tax to the extent of least of the following three amounts:
    • 15 days’ salary, based on the last drawn salary (Basic + D.A.), for each completed year of service;
    • Rs. 3,50,000/-; or
    • The gratuity actually received.
    The Gratuity in excess of this limit is taxable, however, the assessee can claim relief under section 89.

    HMT


  2. No service tax is applicable on gratuity amount. Rate of gratuity different from state to state and from central and state goverments.You have not mentioned your place of working.





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