Question #248517
16. (P4.29*) X, an employee of LMN Ltd., receives Rs. 93,000 as gratuity under the Payment of Gratuity Act, 1972. He retires on January 2, 2021 after rendering service of 20 years and 6 months. At the time of retirement monthly salary was Rs. 8,000 (inclusive of dearness allowance of Rs. 200 per month). Calculate amount of gratuity chargeable to tax. [Ans: Rs. 692]
1
Expert's answer
2021-10-11T16:46:48-0400

Gratuity=Lastdrawnsalaryx15/26xNo.ofyearsofserviceGratuity = Last drawn salary x 15/26 x No. of years of service:


The amount in excess of the tip received is subject to taxation

9300020×8000×1526=69293000-\frac{20\times8000\times15}{26}=692


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