BackWhen does an employee become eligible for gratuity?
Section 4(1) of the Payment of Gratuity Act, 1971, provides that gratuity shall be payable to an employee on the termination of employment after he or she has rendered continuous service for not less than 5 years
PremiumMy wife worked for a company for exactly 4 years and 10months. Is she eligible for gratuity?
— Name withheld on request
Section 4(1) of the Payment of Gratuity Act, 1971, provides that gratuity shall be payable to an employee on the termination of employment after he or she has rendered continuous service for not less than 5 years. Section 4(2) of the act provides that for every completed year of service or part thereof in excess of 6 months, the employer shall pay gratuity to an employee at the prescribed rates. The Madras High Court in Salem Textile Case had held that an employee who has completed 4 years and 240 days is eligible for gratuity.
I have two brothers and we plan to sell a plot that is in our names. We want to build a house in another plot which is in the name of two brothers.
Is there any way to get a tax break for the third brother if his share is also invested in the new property?
— Name withheld on request
We understand that the plot sold is in the name of three brothers, and the plot on which the proposed residential house is to be constructed will be in the name of two brothers.
Under section 54F, the judiciary in the past had adopted purposive construction and allowed a deduction on the residential property constructed on a plot not registered in the assessee’s name. Principles laid out by the Jaipur Tribunal in Ganesh Chawla (ITA no 452/JP/2017) can be relied on by your brother for the tax break on the amount invested in the house property, provided other conditions laid out under the section is satisfied.
I earned ₹9.5 lakh for fiscal year 2021-22. After using the HRA, ELSS benefits, I had to forego over ₹20,000 in taxes. Is there any way to get a refunded later when I file the ITR. Will buying an insurance policy now help?
— Name withheld on request
Under section 80C of the I-T Act, a maximum benefit of ₹1,50,000 can be claimed. The section provides for deduction of premium paid on life insurance provided that the premium paid does not exceed 10% of the sum assured. In addition, you can also claim a medical insurance premium under section 80D for self (spouse and children) for ₹25,000 and for parents ₹25,000. If your age or parent’s age is above 60 years, then the deduction available is ₹50,000 each. Please note that you will not be eligible for deductions if you opt to pay tax under the new tax regime.
Mukesh Kumar M is founding partner and Prasanna K is associate partner of M2K Advisors.
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