Commuted pension tax treatment: part exempt, part taxable; exemption reduced where gratuity is received. Uncommuted pension is fully taxable as salary; commuted pension is partly exempt and partly taxable. Compute a notional full pension value from the commuted payment and apply an exemption fraction: if no gratuity is received, one half of the notional full pension value is exempt; if gratuity is received, one third is exempt. The remainder of the commuted payment is chargeable to tax as salary and must be added to taxable uncommuted pension to determine total taxable pension income.
Gratuity exemption: least of three test determines exempt portion for noncovered employers; excess gratuity is taxable. Gratuity from a noncovered employer is exempt to the extent of the least of three amounts: the service based fraction computed from the average monthly salary (which includes basic pay, one month's dearness allowance, and average monthly commission), the statutory monetary ceiling, and the gratuity actually received; any excess over that exempt amount is taxable.
Gratuity exemption: part determined by 15 days salary times completed years, excess treated as taxable salary. Gratuity exemption is determined by taking the least of: the product of 15 days' salary and completed years of service, the statutory ceiling, and the gratuity received. Completed years may be rounded to include qualifying months. The exempt portion is that least amount; any excess over the exempt amount is taxable as salary income in the assessment year.
Gratuity exemption under Section 10(10)(i) remains available even if retiree accepts private sector employment after retirement. Gratuity paid to a government employee on retirement is fully exempt from income tax under the governing gratuity exemption provision, and that exemption remains available even if the retiree subsequently accepts employment in the private sector.
Comparison of Section 88 "Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
30 August, 2025
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Exemption of capital gains for relocation to SEZs: reinvestment within prescribed window defers taxation, subject to deposit and scheme compliance Exemption applies to capital gains from transfer of assets when shifting an industrial undertaking from an urban area to a Special Economic Zone, ... Summary
Exemption of capital gains for relocation to SEZs: reinvestment within prescribed window defers taxation, subject to deposit and scheme compliance
Exemption applies to capital gains from transfer of assets when shifting an industrial undertaking from an urban area to a Special Economic Zone, functioning as a reinvestment relief if gains are applied to acquire or construct specified new assets in the SEZ within one year before to three years after transfer. Unutilised amounts must be deposited with a specified institution by the return filing due date and later utilised under a notified scheme; any portion unutilised after three years is charged as income. Cost basis of the new asset is adjusted for subsequent transfers within three years.
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