Gratuity deduction rules limit salary income relief through full exemptions, statutory caps, and service-based calculation methods. Deduction of gratuity from salary income is available in full for specified death-cum-retirement gratuity and retiring gratuity under pension rules, and is limited for gratuity under the Payment of Gratuity Act to the amount allowed by that Act. Any other gratuity received on retirement, incapacity, or termination is deductible up to the least of the actual amount received, the prescribed Central Government limit, and half a month's salary for each completed year of service, subject to an aggregate cap where gratuity is received from more than one employer. Salary for this purpose includes dearness allowance only if the employment terms so provide.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Gratuity deduction rules limit salary income relief through full exemptions, statutory caps, and service-based calculation methods.
Deduction of gratuity from salary income is available in full for specified death-cum-retirement gratuity and retiring gratuity under pension rules, and is limited for gratuity under the Payment of Gratuity Act to the amount allowed by that Act. Any other gratuity received on retirement, incapacity, or termination is deductible up to the least of the actual amount received, the prescribed Central Government limit, and half a month's salary for each completed year of service, subject to an aggregate cap where gratuity is received from more than one employer. Salary for this purpose includes dearness allowance only if the employment terms so provide.
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