INCOME TAX

Income tax on Gratuity Arrears paid after the Gratuity Limit Increased to Rs.10/-Lacs

Respected sir, 04/04/2011
I am a retired Bank official retired on 30/09/2009.At the time of my retirement the exemption limit for Gratuity was Rs.3.5/lacs.However due to wage revision i got arrears of Gratuity Rs.151000/-In the month of Aug 2010 by which time Gratuity Exemption limit was raised to Rs.10,00 000/- Whether gratuity arrears of Rs.151000/- received by me in Aug,2010 is taxable? My total Gratuity amount received is less than Rs.10/- Lacs

Second query I paid Rs.606001/- by way contribution towards Pension fund to avail Pension option which was compulsory if u want to exercise second option of pension.This is applicable to all employees who now opted for pension has to contribute 56% of the banks contribution they received which also has to be refunded.

Pl note i had to pay Rs.10,21,858 Banks' contribution + Rs.5,72,274/- 56% of Bk's contribution i.e employee’s own contribution as purchase price

Total Rs.1594098/-

But this amount was adjusted against Rs.714089 Commutation (non taxable) payable to me and Rs.274008/- Pension arrears (Taxable) payable to me up to oct 2010 and I paid net amount of Rs.606001/- towards the purchase price of Pension

Question is whether we can claim exemption for the arrears amount we received by way of pension? In my case I received Pension of Rs.274008/- up to Oct 2011 and I paid Rs.606001/- towards pension cost..

Since the year ending is very close i request u to assist me in the matter at your earliest. This will be useful to all employees in the Banking Industy who opted for second option of pension

with regards

RHR MUMBAI

asked Apr 16 '11 at 02:54 by RHR 1111

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Asked: Apr 16 '11 at 02:54

Seen: 2,054 times

Last updated: Apr 16 '11 at 02:54