Section 10(10) → Section 19 (Sl. 3–6)

Gratuity exemption — ₹20 lakh limit

Section 10(10) of the old Income-tax Act, 1961 · new section 19 (Sl. 3–6) under the Income-tax Act, 2025

New reference Section 19(1), Table Sl. Nos. 3–6 and 19(2)(a)

Income-tax Act, 1961Section 10(10)

10(10)(i): Government employees — fully exempt
10(10)(ii): employees covered by the Payment of Gratuity Act — 15 days' salary per completed year (salary ÷ 26), up to ₹20 lakh
10(10)(iii): others — least of actual gratuity, ₹20 lakh, and half a month's average salary per completed year
₹20 lakh is a lifetime limit across employers

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 19(1), Table Sl. Nos. 3–6 and 19(2)(a)

Sl. No. 3: death-cum-retirement gratuity of Government and local authority employees — entire amount
Sl. No. 4: defence services gratuity — entire amount; Sl. No. 5: Payment of Gratuity Act — as computed under section 4(2), (3) of that Act
Sl. No. 6: others — least of actual, notified limit (₹20 lakh) and half month's average salary (last 10 months) × completed years
19(2)(a): limit reduced by gratuity exempted in earlier years — lifetime cap

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered from section 10(10) into the section 19 salary table; limits and formula unchanged. The ₹20 lakh limit notified under the 1961 Act (Notification 16/2019, S.O. 1213(E), 8 March 2019) continues under section 536(2)(j).

Practice notes

Available under both regimes — section 202 denies only Sl. No. 1 (professional tax) of the section 19 table.
Note on form: in the 2025 Act these are deductions in computing salary (section 19 table), not exemptions under section 10 — the effect is the same.
Gratuity received while still in service is fully taxable as salary.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is section 10(10) called in the new Income Tax Act?

Section 19(1), Table Sl. Nos. 3–6 of the Income-tax Act, 2025.

What is the gratuity exemption limit for 2026-27?

₹20 lakh for non-Government employees (lifetime, across employers); Government employees are fully exempt. Available in the new regime too.

What changed in section 10(10) under the new Income Tax Act?

Is section 10(10) still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 10(10) of the 1961 Act. Section 19 (Sl. 3–6) of the 2025 Act applies from tax year 2026-27.

Related sections

16→19Deductions from salary: standard deduction, professional tax (and gratuity exemption)10(10AA)→19Leave encashment on retirement — ₹25 lakh limit 10(10C)→19Voluntary retirement (VRS) compensation — ₹5 lakh