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Gratuity Received by a Non-Government Employee covered by Payment of Gratuity Act, 1972 [Section 10(10)(ii)]

As per section 10(10)(ii), exemption in respect of gratuity in case of employees covered by the Payment of Gratuity Act, 1972 will be lower of following :


       15 days’ salary × years of service.


       Maximum amount specified, i.e., Rs. 10,00,000.


       Gratuity actually received.



1)         Instead of 15 days’ salary, only 7 days salary will be taken into consideration in case of employees of seasonal establishment.


2)         15 days’ salary = Salary last drawn × 15/26


3)         Salary for this purpose will include basic salary and dearness allowance only. Items other than basic salary and dearness allowance are not to be considered.


4)         In case of piece rated employee, 15 days’ salary will be computed on the basis of average of total wages (excluding overtime wages) received for a period of three months immediately preceding the termination of his service.


5)         Part of the year, in excess of 6 months, shall be taken as one full year.


More Topics... @ Exempted Incomes
Exempted Incomes : Sec.10(1) to Sec.(4)(ii)
Exempted Incomes : Section-10(7)-Section-10(9)
Exempted Incomes : Section-10(10)-Sec-10(A)-Sec-10(AA)-Sec-10(B)
Exempted Incomes : Section-10(10BB)-Sec-10(10BC)-Sec-10(C)
Exempted Incomes : Section-10(10CC),Sec-10(10D),Sec-10(11),Sec-10(12),Sec-10(13)
Exempted Incomes : Section-10(15A),Sec-10(16),Sec-10(17),Sec-10(17A)
Exempted Incomes : Section-10(18),Sec-10(19),Sec-10(19A),Sec-10(20)
Exempted Incomes : Section-10(21),Sec-10(22B),Sec-10(23A),Sec-10(23AA)
Exempted Incomes : Section-10(23AAA),Sec-10(23MB),Sec-10(23A),Sec-10(23AA)
Exempted Incomes : Section-10(23BBA),Sec-10(23BBB),Sec-10(23BBC),Sec-10(23BBE),Sec-10(23BBH)
Exempted Incomes : Section-10(23C),Sec-10(23D),Sec-10(23DA),Sec-10(23EA),Sec-10(23EB),Sec-10(ED)
Exempted Incomes : Section-10(23FB),Sec-10(24),Sec-10(25),Sec-10(25A),Sec-10(26A)
Exempted Incomes : Sec.10(4B) to Sec.10(6)
Exempted Incomes : Section-10(26AAN),Sec-10(26AAB),Sec-10(26B),Sec-10(26BB),Sec-10(26BBB)
Exempted Incomes : Section-10(27),Sec-10(29A),Sec-10(30),Sec-10(31),Sec-10(32)
Exempted Incomes : Section-10(33),Sec-10(34),Sec-10(34A),Sec-10(35),Sec-10(35A),Sec-10(36)
Exempted Incomes : Section-10(37),Sec-10(38),Sec-10(39),Sec-10(40),Sec-10(41)
Exempted Incomes : Section-10(42),Sec-10(43),Sec-10(44),Sec-10(45),Sec-10(46),Sec-10(47),Sec-10(48),Sec-10(49)
Exempted Incomes : Section 10(6A), (6B), (6BB) and (6C)
List of Exempted Incomes (Tax-Free) Under Section-10
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