1999 TAX. L. R. 755 ::(1999) 153 CurTaxRep 134 ::(1999) 237 ITR 472 ::(1999) 104 Taxman 132 ::1999 Bom LR 2 339 ::(1999) 150 Taxation 491

Bombay High Court

Hon'ble Judge(s): B. P. Saraf, S. H. Kapadia , JJ

Gratuity amount - Tax exemption - Assessee availing of the full exemption of Rs. 30,000/- under S. 10(10) regarding gratuity received by him from previous employment in Air India in 1968 - Entire gratuity received@page-TAXLR756by him from subsequent employment in the year 1976 is taxable under S. 10(10)(iii). Income-Tax Act (43 of 1961) , S.10(10), S.119— C.B.D.T. Circular No. 108, D/- 20-3-1993. Prior to the Finance Act, 1974 gratuities received by the employees of statutory corporations fell within first part of the old Section 10(10) whereas under the Finance Act, 1974 such gratuities fall under the expression 'any other gratuity' referred to in sub-clause (iii) of Section 10(10). To repeat, the ceiling limits prescribed by each of the sub-clauses vary. The object of the amendment clearly was to remove anomalies in the old Section 10(10) between the employees in the private sector and the employees in the statutory corporations. It is for this reason that the gratuities falling under the first part of old Section 10(10) stand removed and brought into the sub-clause (iii) of Section 10(10) so that the gratuities payable to employees of statutory corporations and employees in private sector are subjected to common ceiling limit. The Finance Act, 1974 has made a specific provision to secure that the aggregate amount of tax exempt gratuity in such cas....