Taxation of gratuity differs for govern-ment and non-government employees. Gratuity received by government emplo-yees is fully exempt from tax.
Taxation of gratuity is different for govt and non-govt employees l I will retire next month and get gratuity of Rs 30 lakh. On what amount will I have to pay tax and at what rate? – Ravi Kiran
Taxation of gratuity differs for govern-ment and non-government employees. Gratuity received by government emplo-yees is fully exempt from tax. For private sector employees covered under Payment of Gratuity Act, exempted gratuity is computed in the manner specified in the Act. For other employees, exempted grat-uity shall be lower of: Rs 10 lakh or actual gratuity received; or amount of gratuity an employee is eligible to receive, i.e., 15 days salary based on the last drawn salary for each completed year of service or part thereof in excess of six months.
*I trade in shares and earn profit of around Rs 2 lakh a year. Do I have to pay capital gains tax? —Dilip Khanna
Taxability of income earned from stock trading may be taxed as capital gains or business income depending on the type of trading undertaken by a person. If the income is taxed as capital gain, it shall further be classified into long term capital gains and short term capital gains on the basis of period of holding of shares. If it is taxed as business income, it shall further be catego-rised into speculative and non-speculative business income. Given the limited facts, the category of the income earned by you from share trading is not ascertainable.
* Can I combine my salary and professional income to pay tax at marginal rate? —Manav Gupta
A taxpayer is required to report the total income earned by him under five different heads. Aggregate of such income after specified deductions and disallowances are offered to tax at slab rate applicable to such a taxpayer. Thus, you can pay tax at the slab rate applicable to you after combining your salary income and professional income.
* My son has joined a shipping firm in Australia and will sail for about 150 days in a year, rest of the time he will be in India. How will he pay his tax? —Kailash Kumar Garg
An Indian citizen working abroad or a member of a crew on an Indian ship is considered an Indian resident if he stays in India for more than 182 days during that financial year. Non-resident Indians are subject to tax in India only in respect of India sourced income. Income which is received and earned outside India is not taxable in India
The writer is director, Nangia Advisors LLP. Send your queries to firstname.lastname@example.org