How are PF, Gratuity, retirement benefits taxed?

Forums Retirement Benefits How are PF, Gratuity, retirement benefits taxed?

How are PF, Gratuity, retirement benefits taxed?

Are retirement benefits like PF and Gratuity taxable? How are they taxed in case they are taxed?

Profile photo of  Paresh Mahajan Asked By: Paresh Mahajan 1 replies 1 helpful answers Last Updated: 4 months, 3 weeks ago
  • Profile photo of  Paresh MahajanParesh Mahajan
    Participant

    Are retirement benefits like PF and Gratuity taxable? How are they taxed in case they are taxed?

  • Profile photo of Chetan ChandakChetan Chandak
    Moderator

    For a Government employee, Gratuity and PF receipts on retirement are exempt from tax.
    However, for non-Government employee, gratuity is exempt subject to the limits prescribed in this regard and PF receipts are exempt from tax, if the same are received from a recognised PF after rendering continuous service of not less than 5 years.

    However a member of the PF scheme shall be entitled to tax free withdrawal of the PF amount standing to his credit on retirement from service after attainment of 58 years.

    Further where Period of service less than 5 years and the termination is due to ill health, discontinuance of business of employer then noting will be taxable.

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