• Income tax

I am 53 of age company gave prematurity retirement.  In order to save tax on  exgratia. For 54 months can it be spread. In future financial year 2. Can I gift to my son . Encashment can be spread.3 pf  accumulation is  taxable at age of 53 to 58
Asked 5 months ago in Income Tax from Udaipur, Rajasthan
Hello Sir,

Please refer to the taxability of different components prescribed as per the income tax act.

1. Gratuity- Gratuity is not taxable unless the amount exceeds 20 lacs as per the new provisions. Can you please let me know the amount of gratuity received ?

2. PF withdrawal- Provident fund amount received after working for 5 years, is any ways not taxable.

3. Gift taxability-  If you gift any amount or in kind to your son, it is not taxable in his hands as he is covered under the definition of relative.

4. Pension- Any pension received after retirement in future out of pension fund/Provident fund will be taxable as salary in your hands.

Thanks
Damini
Damini Agarwal
CA, Bengaluru
269 Answers
13 Consultations

5.0 on 5.0

Hi,

Your questions are not very clear to me.
PF, Gratuity ( to a certain extent) are non taxable. You can gift to your son without any tax liability.

Would request you to clearly let us know your query so that we can answer accordingly.

Regards,
Nikhil.
Nikhil Khanna
CA, Mumbai
1286 Answers
14 Consultations

5.0 on 5.0

1) Exgratia is fully taxable as profits in lieu of salary. Relief can be claimed for previous years and not for future years.

2) Leave encashment is exempt u/s 10. You need to calculate exemption figure at your end.

3) Yes you can gift to your son. It is advisable that it should be on stamp paper.

4) In case of salaried class, option to reduce the tax is only investment u/s 80C or interest on housing loan.

5) It will be taxable yearly on accrual basis.

Vivek Kumar Arora
CA, Delhi
1531 Answers
35 Consultations

5.0 on 5.0

Hi,
Ex gratia will be taxable. 
Leave encashment is exempt.
When giving gift to a relative, it is advisable that the same be on stamp paper.
I doubt if there is any other avenue of saving taxes except the 80C, 80D, that you would have already claimed
Interest earned on PF will be taxable .

Regards,
Nikhil.
Nikhil Khanna
CA, Mumbai
1286 Answers
14 Consultations

5.0 on 5.0

Hello,

No surcharge is leviable, since it is less than 1 Cr. But I doubt if you can save taxes on it.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

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