1. Your queries: Tax exemption on gratuity continues to be Rs 10 lakh in absence of amendment

Your queries: Tax exemption on gratuity continues to be Rs 10 lakh in absence of amendment

Current income tax law provides maximum tax exemption limit of Rs 10 lakh on gratuity. Accordingly, till any amendment this limit will be applicable.

By: | Updated: July 5, 2017 4:34 AM

I retired from a government company in September 2016 and received gratuity of Rs 27 lakh and got income tax exemption on Rs 10 lakh. My employer assured me that the exemption limit has been raised to Rs 20 lakh and I may claim it when filing IT return as by then the necessary notification will be issued. As I will have to filereturn by July 31, what should I do?
—K Nathuramka

Current income tax law provides maximum tax exemption limit of Rs 10 lakh on gratuity. Accordingly, till any amendment this limit will be applicable.

I had bought an endowment policy from LIC of India for Rs 2 lakh for a term of 25 years. On maturity, I have now received around Rs 6 lakh. Is the entire amount exempt from income tax?
– Avinash Kumar
Yes, usually any sum received under an insurance policy is exempt from tax. However, there are certain categories where exemption is not available like policy issued on or after April 1, 2003 but on or before March 31, 2012 for which the premium payable exceeds 20% of the actual capital sum assured, etc. We need more information on the insurance policy in order to conclude.

Is it mandatory to declare all my bank accounts while filing income tax returns?
— Kushal Deora
The income tax return form mandatorily requires details of all savings and current accounts held at any time during the previous year. However, details of dormant account, i.e. account which is not operational for more than three years, is not mandatory.

In debt mutual funds indexation, do I have to do it myself at the time of filing returns or will the fund house do it for me?
— M Murugesh
The individual would need to get a confirmation from the fund house if the capital gains/loss has been calculated after indexation. If not, then the indexation would need to be done at the time of filing the return provided that the holding in the debt mutual fund qualifies as a long term capital asset.

The writer is tax partner & India Mobility Leader, EY India. Send your queries to fepersonalfinance@expressindia.com

  1. D
    D SAHU
    Jul 5, 2017 at 9:55 am
    MY EMPLOYER FAILED TO DEDUCT MY HOME LOAN INTEREST AND PRIN L AND MY SAVINGS FROM MY GROSS RY AND ISSUED FORM 16 IN MY NAME .CAN I DEDUCT INTEREST AND PRIN L AND SAVINGS WHILE I FILE MY IT RETURN AND HOW.
    Reply
  2. D
    D SAHU
    Jul 5, 2017 at 9:37 am
    MY MOTHER 52 YEARS OLD IS A CENTRAL GOVT. EMPLOYEE.SHE ALSO DRAW FAMILY PENSION.IS ANY STANDARD DEDUCTION ON FAMILY PENSION AND HOW MUCH ? IS FAMILY PENSION AND RY TAKEN TO GATHER TO CALCULATE INCOME TAX ? RS 3 LAC FAMILY PENSION PER ANNUM AND RS 8 LAC RY PER ANNUM ON FY 2016-17, U/S 80 C SAVINGS 1.5 LAC.HOW TO CALCULATE INCOME TAX.
    Reply

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