Exemption to Gratuity under Section 10(10)(i) of the Income Tax Act

3 years ago

I retired on superannuation in July, 2019. During the Financial year 2019-20, I received total salary of Rs.7,00,000/- for the period from April,19 to July,19. In August, 2019 while making the payment of sanctioned death-cum-retirement gratuity of Rs.19,00,000/- under the CCS (Pension) Rules, my employer recovered Rs.5,00,000/- from the gratuity on account of excess paid salary during the previous years i.e. March,2012 to June,2019. While issuing the Form-16, the employer allowed exemption of gratuity under Section 10(10)(i) of the Income tax Act to the tune of Rs.14,00,000/-(Rs.19,00,000/- minus Rs.5,00,000/-) whereas I am contesting that this exemption should be for Rs.19,00,000/- i.e. for the whole amount sanctioned under the CCS Pension Rules as deduction was for recovery of excess paid salary during the previous years. Secondly Section 10(10)(i) says that whole amount of Gratuity received under the CCS Pension Rules subject to a limit of Rs.20,00,000/- [Emphasis is on the words underlined]. Expert opinion is solicited.