Dear sir,
My client had been
retired from 01.08.2017 and his company has tied up with icici prudence for
superannuation fund. And icici prudence has tied up with LIC.
He has also received
gratuity from company
Now my client has
received 1/3 of fund from Icici prudence on 1.9.2017. And icici prudence has
paid up 2/3 amount to LIC for annuity and now my client is receiving annuity
amount month.
Kindly guide me on
taxability of all transaction mentioned above and relief & deduction if
any.
Reply
Sir,
As per section 10(13) of Income Tax Act, 1961, where an employee received
payment from an approved superannuation fund on retirement the same is exempt
from tax. Therefore commuted amount of superannuation fund received at the time
of retirement is not taxable provided the said superannuation fund should be
approved.
Whereas the monthly annuity amount
is taxable under the head "income from other sources".
Exemption on gratuity amount
(non-government employee)
where gratuity act is applicable on
employer organization, least of the following is exempt from tax:
1) actual amount of gratuity
received
2) fix amount of Rs. 20 lakh
3) Last salary (basic + D.A.)*
number of years of employment *15/26
(where gratuity act is not applicable on the organization
method of calculation of exempt amount of gratuity is same as above except
replace 15/30 instead of 15/26 in 3rd point)