Ex-Gratia - Ex Employee

Dear Seniors,
Please reply what is 'Ex-Gratia'? How it is useful for
employee and employer ?
With Due Regards
Tribikram

Dear Tribikram,
Ex-gratia is Latin (lit. 'by favour') and is most often used in a legal context. When something has been done ex gratia, it has been done voluntarily, out of kindness or grace. In law, an ex gratia payment is a payment made without the giver recognising any liability or legal obligation.
Most of the cases Ex-gratia is paid along with annual bonus, since the Payment of Bonus Act, puts a cap on 20% bonus to employees, the employer and employee agree to pay a higher amount than 20%, and coined a new term of ex-gratia, which is paid along with Bonus.
Rgds,
Suresh Ramalingam
Consultant - Compliance

Hi,
When an employer give it as Ex-gratia i.e., on top of annual bonus, is that a taxable income or how is that treated with regard to income tax.
Pls let me know,
Pradeep

Dear Friends,
I fully agree with Mr.Suresh Ramalingam. But there is an additional information. For the industries like service industries (Hospitals), social work orgs, where there is " No profit No loss " concept, they will give ex-gratia for the employees, because they are not covered under Payment of Bonus Act.
For the payment of ex-gratia, there is no cieling and also the % may get varied from year to year and is purely descretion of the management.
Mangai

is it ex-gratia is taxable. We paid this amount along with salary at the time of diwali one time. can anybody tell me is it taxable or not