New Delhi, April 6 -- A gratuity lumpsum amount paid by an employer to their employees as recognition for long-term service. Gratuity is governed by labour laws and is a statutory right in India.

Gratuity laws are applicable to employees who have completed a minimum term of five years of continuous service in an establishment with ten or more employees. For fixed-term employees who work on a contractual basis, the government has implemented the new labour codes to ensure that they receive their gratuity after one year of continuous service.

Since gratuity is a lumpsum amount, employees often receive a large sum at the end of their service to a company. This may raise the question - is gratuity taxable?

Gratuity is a monetary benefits p...