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An ex gratia payment is presented to an individual by an organization, government, or insurer for damages or claims. Still, it does not need the admittance of liability by the party initiating the payment.
The Gujarat High Court in the case of Arunbhai R. Naik1 (the taxpayer) held that a voluntary payment made by the employer without there being an obligation on the part of the employer to pay any further amount, would not amount to compensation in terms of Section 17(3) of the Act.
Ex gratia payments are not taxable in India, unless they are made in lieu of salary or wages. The amount of the payment is not limited, but it is generally based on the individual's or group's needs and circumstances.
In other words, Ex gratia payments are not taxable in India, unless they are made in lieu of salary or wages. Ex gratia payment in Covid. CBDT prescribes procedure for claiming tax exemption in respect of any sum received as ex-gratia, for treatment of ‘COVID-19’ or consequential death, by Individual/ family members.
Mar 23, 2024 · Is it true that the said ex-gratia is not taxable? There seems to be a case (Arunbhai R Naik) decided by the Gujarat High Court on the matter wherein it was held that such ex-gratia will not be treated as profit in lieu of salary within the ambit of ‘income from salaries’.
Is ex gratia payment taxable? Generally, all the payments made by the employer to the employees are subject to taxation in India. These payments come under the employment contract. However, an ex gratia payment is an extra payment made by the employer, and such an amount without any legal obligation is not taxable. However, in the United States ...
Apr 22, 2024 · Is ex-gratia payment taxable? Generally, all the payments made by the employer to the employees are subject to taxation in India but there are a number of exemptions. Following are some of the exemptions that apply to ex-gratia payments.
