CA Inter DT | Silly Salary Mistakes You MUST Avoid | May 2026

Added: 2026-05-10

[00:00:00]See, look at this, guys. I'm doing one proper comparative analysis for you, comparing three things: leave salary, gratuity covered by POJA, and gratuity not covered by POJA. Basically, in this uh chart, I'm comparing those elements where generally students get tend to get confused when it comes to retirement benefits, okay? See, um in leave salary, first of all, when you're calculating salary, do you take average monthly salary, or do you take last drawn salary? You take average monthly salary in leave salary. You don't take last drawn salary. But gratuity covered by POJA, here you take last drawn salary.

[00:00:35]And gratuity not covered by POJA, here also you take average monthly salary.

[00:00:40]So, are you noticing? Leave salary also we take average monthly salary, 10 months average we take. Gratuity also we take average monthly salary, again 10 months average. But gratuity covered by POJA, here we don't take average monthly salary, we simply take last drawn salary, okay? And one more thing, all right. When you do this average monthly salary for leave salary, it's how many months average? It is 10 months average.

[00:01:02]But 10 months before what? 10 months before the date of retirement. But when it comes to gratuity, your average monthly salary is going to be again 10 months average, but 10 months before the month of retirement. So, this is small, you know, catch over here which you have to be careful about. Here in leave salary, it is 10 months before date of retirement, whereas in gratuity, it is 10 months before month of retirement, okay? This is one small thing. Then come the second point. When you're doing leave salary calculation, uh the salary is going to be 10 months average, 10 months before the date of retirement.

[00:01:38]That 10 months average salary will have how many components? It'll have three components. It'll have basic salary plus DA forming part, plus employees turnover based commission, three components. Then gratuity where you're covered by POJA, here you will find last drawn salary.

[00:01:52]This last drawn salary will have only two components, guys, and that is basic salary plus DA, that's all, okay. Then if gratuity is not covered by POGA, here also you will have three components, usual three components, basic salary plus DA forming part plus employees turnover based commission.

[00:02:07]Understanding? So, generally leave salary also, gratuity not covered by POGA also, in both of these you have to something very similar, three components you're taking in salary, but gratuity covered by POGA you're having only two components, basic salary plus DA. See, here I'm not saying DA forming part, which means in gratuity covered by POGA I will take all DA, whether the DA is forming part, not forming part, doesn't matter, okay. Then what about the number of years? What will you do with the fraction? In leave salary, we always ignore the fraction and we take only the completed years. Whatever be the fraction, doesn't matter, we'll ignore the fraction. Like if the employee has worked for 15 years and 3 months, we will consider it as 15 years. 15 years 6 months, we will consider it as 15 years.

[00:02:49]15 years 7 months, we will consider it as 15 years. Basically, whatever be the fraction we will ignore the fraction and we'll take the completed years only.

[00:02:57]Then gratuity where you're covered by POGA, here we consider the fraction, guys. If the fraction is less than 6 months, we ignore. So, here we'll take 15 years. If the fraction is less than 6 months or even equal to 6 months, we will ignore the fraction. We'll take 15 years. But if the fraction is more than 6 months, like if it is 15 years 6 months 1 day, it is more than 6 months. Or here in my example, 15 years 7 months. If it is more than 6 months, then you will round up the fraction to the next number, which means you will take 16 years over here. Getting my point? So, if the fraction is up to 6 months, you will ignore the fraction. If the fraction is more than 6 months, then you will round up to the next year, okay? Then what if your employee is receiving gratuity and he's not covered by POGA? Then very similar to leave salary. I want you to make an observation over here.

[00:03:46]When it when it comes to leave salary and gratuity not covered by POGA, they're are or less similar. Right, guys? Gratuity covered by POGA only is a different league altogether. Okay. So, coming back to gratuity not covered by POGA, whatever be the fraction, I will ignore. Whether it is less than 6 months, whether it is more than 6 months, I don't care.

[00:04:06]I'll ignore the fraction. I'll take only the completed years. Then, how much maximum exemption do you get in your entire lifetime? For leave salary, maximum exemption is 25 lakhs. For gratuity, whether you're covered by POGA, whether not covered by POGA, maximum exemption is 20 lakhs. Then, what if you get leave salary during service? If you receive leave salary during service, it will be fully taxable for you. Same thing will apply even for gratuity, whether you're covered by POGA, whether you're not covered by POGA, if you receive these benefits during service, it will be fully taxable. Then, what if you get these benefits upon retirement? Then, if you're a government employee, whether central government employee, whether state government employee, doesn't matter. If you're receiving these benefits upon retirement, then it will be fully exempt. Nothing will be taxable. If you're a government employee, nothing will be taxable. But, what if you're a non-government employee? Then, it will be taxable. How much will be taxable?

[00:04:56]You'll have to see how much is received.

[00:04:58]You'll have to calculate how much is exempt, and the balance will be taxable.

[00:05:01]So, received minus exempt will be taxable.

[00:05:06]Understanding, guys? So, how much will be exempt? This is a calculation that you will have to do. This is the calculation which will carry the most number of marks in the examination. Got the point? Yes, I just wanted to make a summary for you. I hope you've understood this properly. Don't get confused in the examination. Make sure you have a look at this chart before you walk into the examination. It will be really, really helpful for you. All right.