what is meant by Government employee for income tax act ?

[tejas kulkarni]

one of my client is reitred employee of MSEDCL.(Mah state electricity developement corporation). He received gratuity of ₹ 30 lakh. Can he take exemption of entire amount of gratuity received u/s 10(10) on the ground Government employee.

MSEDCL is State Govt owned company .

Can the employee of Government company be treated as government employee ?

further u/s 21(b) of Indian penal code defines Govt employee as' employee of Govt company is govt employee.' Can we take this as concrete base during the assessment proceedings.?

[KASTURI SETHI]

A corporation formed under an Act is not Government. It is a body corporate. Govt. company is not a department of Govt. It has separate legal existence. If a Govt. company is not Government, how its employees can be treated as Govt. employee ?

[DR.MARIAPPAN GOVINDARAJAN]

No. The employee of a corporation cannot be treated as 'Government employee'.

AI Summary

Government employee status may not extend to employees of state-owned corporations for income tax gratuity exemption. Whether an employee of a state-owned corporation qualifies as a government employee for income tax gratuity exemption is questioned. The forum response is that a government company is a separate body corporate, not a government department, and employees of such corporations cannot be treated as government employees for the purpose of claiming gratuity exemption; reliance on a penal statute's definition is discussed but not accepted as conclusive for assessment proceedings.