Income tax

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 6 years ago in Income Tax

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, Bangalore

407 Answers

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Talk to Damini Agarwal

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

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. I am of age 53 .5 company gave me prematurity reitement as a special consideration some financial benefits are given say around 60 l. I want to know can I save tax while considering following heads
1
 Exgratia approx 40 l can it be spread as it is future  earning for 54 months
2 pl and sl approx 6l can it be spread over previous year as leaves for which payment is granted is for previous year
3.if I give gift to my son around 10l than is I have to prepare gift deed on how much value of stamp or not required
4 as my taxable income is going to be more than 50 l than what are the ways to get it reduced as already 12 l is deducted at source.and chances of surcharge is there
5 if I keep my accumulated pf in trust only  till i am 58 than interest  earned on it is taxable?

Asked 6 years ago

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

Available Now

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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

1429 Answers

19 Consultations

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Talk to Nikhil Khanna

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

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