As per the Indian Gratuity rules, a person needs to complete 5 years with a company. Suppose a person joins a proprietary company which does not provide for gratuity. After 4 years, the company becomes a Pvt Ltd and starts providing gratuity. Now, if the employee leaves after 3 years, the total service is 7 years, but the period under the Pvt Ltd is only 3 years. Will the employee be eligible for gratuity?
From India, Bangalore
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1From India, Bangalore
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The Payment of Gratuity Act (like any other labour act) has nothing to do with how the ownership of the establishment is formed. Therefore, there is no difference in the treatment when the establishment is set up as a Proprietorship or a Company form (private limited or Public limited).
When the proprietary concern is converted into a company form, a new entity is formed. This act is equivalent to the transfer of undertaking, and the provisions of the Industrial Disputes Act would apply to such conversions. It should be presumed that the service conditions of the employees have remained the same, and as such, all employees who were on the roll before the formation of the company should be treated as having joined on the actual dates and entitled to gratuity.
Regards,
Madhu.T.K
From India, Kannur
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When the proprietary concern is converted into a company form, a new entity is formed. This act is equivalent to the transfer of undertaking, and the provisions of the Industrial Disputes Act would apply to such conversions. It should be presumed that the service conditions of the employees have remained the same, and as such, all employees who were on the roll before the formation of the company should be treated as having joined on the actual dates and entitled to gratuity.
Regards,
Madhu.T.K
From India, Kannur
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No problem if the establishment was not covered by EPF when it was constituted as a proprietary concern. EPF contribution has nothing to do with the Payment of Gratuity, and for that, there is no deduction from the salary also.
Constitution of the company as a partnership or private limited or public limited company is only a matter of management, and it will not affect the services of the employees unless otherwise agreed upon. On conversion, the assets and liabilities of the one-man ownership company are taken over by the newly constituted entity, i.e., the private limited company. By such an act, the company is taking over the employees also, and by that taking over, any amount payable to the employees is also being taken over.
Regards,
Madhu.T.K
From India, Kannur
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Constitution of the company as a partnership or private limited or public limited company is only a matter of management, and it will not affect the services of the employees unless otherwise agreed upon. On conversion, the assets and liabilities of the one-man ownership company are taken over by the newly constituted entity, i.e., the private limited company. By such an act, the company is taking over the employees also, and by that taking over, any amount payable to the employees is also being taken over.
Regards,
Madhu.T.K
From India, Kannur
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how to present the quality circle presentation ? and how to make presentation by power point M/S please send with power pont presentation we waiting for ur M/S power point. thank u sir
From India, Delhi
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From India, Delhi
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Hi...Pf will be calculated on the basic salary i.e 12% of the basic salary. Gratuity formula -> last drawn basic salary*15/26*no.of years of service
From India, Bangalore
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From India, Bangalore
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Quality circle is a group of people working in the same place to ease and improve their jobs. Initially, you have to form a group, and then, using quality circle tools, you can solve problems and create presentations in PowerPoint (PPT).
Thanks & Regards,
Devendra Kumar Dubey
From India, Varanasi
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Thanks & Regards,
Devendra Kumar Dubey
From India, Varanasi
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Dear Madhu, I agree with you. But some companies, if EPF is not covered during proprietorship, issue a fresh letter of appointment after the conversion of the firm to a private limited. In such cases, the employees lose their right to gratuity for the period of service under the proprietorship firm. It happened to some of my colleagues.
Regards,
From India, Hyderabad
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Regards,
From India, Hyderabad
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Hi all,
Actually, I was working in a software company for 3 months, and I was in training. During this time, I got admission to a good college and was required to join the college very soon. However, according to company rules, I should serve for at least 2 months after submitting my resignation. So, I just sent an email with my medical certificate stating that I was unwell and would not be able to come to work for the next 6 months. I then quit the job without informing anyone.
Now my question is: the same company is coming for campus placement at my college. Am I eligible to participate in the company's recruitment process? If not, is there any other way to obtain permission to work in the same company again? When I was working, I wasn't assigned to any project; it was just training.
Thank you.
From India, Madras
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Actually, I was working in a software company for 3 months, and I was in training. During this time, I got admission to a good college and was required to join the college very soon. However, according to company rules, I should serve for at least 2 months after submitting my resignation. So, I just sent an email with my medical certificate stating that I was unwell and would not be able to come to work for the next 6 months. I then quit the job without informing anyone.
Now my question is: the same company is coming for campus placement at my college. Am I eligible to participate in the company's recruitment process? If not, is there any other way to obtain permission to work in the same company again? When I was working, I wasn't assigned to any project; it was just training.
Thank you.
From India, Madras
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Five Years is generally necessary according to the Gratuity Act. However if Gratuity payments are included in your CTC then the Management is bound to honor for less than 5 years . ss rao
From India, Bangalore
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From India, Bangalore
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Dear,
Please go through section 4 of the Payment of Gratuity Act, 1972 for both of your queries regarding eligibility, maximum payment limit, and calculation of gratuity amount.
With Regards,
R.N.Khola
From India, Delhi
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Please go through section 4 of the Payment of Gratuity Act, 1972 for both of your queries regarding eligibility, maximum payment limit, and calculation of gratuity amount.
With Regards,
R.N.Khola
From India, Delhi
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In your question, it is not clear whether the number of employees at the time of being a proprietary firm was less than ten. The Payment of Gratuity Act shall apply to a factory/mine/shop/establishment, etc., where ten or more persons are/were employed. If, at the time of being a proprietary firm, the company had a total number of employees less than ten, and after conversion to a Private Ltd. company, the total strength becomes ten or more than ten, the Gratuity Act will be applicable from that point onwards and not before.
Regards,
Debrishi
From India, Mumbai
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Regards,
Debrishi
From India, Mumbai
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Thank you, Debrishi.
You have raised a very valid point. Now, the proprietary firm had more than 10 employees, but they were employed as consultants. There was no PF or Gratuity, only TDS deduction.
What would be the impact in this case?
From India, Bangalore
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You have raised a very valid point. Now, the proprietary firm had more than 10 employees, but they were employed as consultants. There was no PF or Gratuity, only TDS deduction.
What would be the impact in this case?
From India, Bangalore
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Certainly, the Payment of Gratuity Act may be applicable to companies that employed at least 10 persons during any day of the year. However, this does not necessarily mean that the calculation of an employee's service should start from that date. Therefore, if an employee has been in continuous service in an employment that has not been interrupted due to a change in management, it should be considered when calculating his gratuity.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Five years of active service is necessary for gratuity. The employee should work 240 days continuously in a year.
I want information on the deduction of Income tax from the gratuity amount. Can anybody provide information on this?
From India, Hubli
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I want information on the deduction of Income tax from the gratuity amount. Can anybody provide information on this?
From India, Hubli
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Dear Manjula,
No income tax is to be deducted if the payment of gratuity is made as per the requirement of the Payment of Gratuity Act, 1972.
With Regards,
R.N.Khola
Manjula VT had inquired about the requirement for gratuity, stating that five years of active service is necessary, and the employee should work continuously for 240 days in a year. She also asked for information on the deduction of income tax from the gratuity amount.
Thank you.
From India, Delhi
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No income tax is to be deducted if the payment of gratuity is made as per the requirement of the Payment of Gratuity Act, 1972.
With Regards,
R.N.Khola
Manjula VT had inquired about the requirement for gratuity, stating that five years of active service is necessary, and the employee should work continuously for 240 days in a year. She also asked for information on the deduction of income tax from the gratuity amount.
Thank you.
From India, Delhi
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Dear Mr. R.N. Khola,
Sir, as this thread is regarding the Gratuity Act, I have some queries regarding that:
1. Is the gratuity amount payable to an employee taxable or nontaxable?
2. What are the cases when an employer can get an exemption from this act (Payment of Gratuity Act)? Please provide some examples.
Regards,
Bandini
From India, Delhi
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Sir, as this thread is regarding the Gratuity Act, I have some queries regarding that:
1. Is the gratuity amount payable to an employee taxable or nontaxable?
2. What are the cases when an employer can get an exemption from this act (Payment of Gratuity Act)? Please provide some examples.
Regards,
Bandini
From India, Delhi
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Dear Bandini,
According to the clarification made by the members, income tax is not to be deducted on the gratuity amount received up to Rs. 3.5 lakhs. Please go through section 5 of this Act to have exemption from this Act. The Government of Haryana has given an exemption from the operation of the Payment of Gratuity Act, 1972 to the Haryana State Electricity Board in the year 2006/07.
With Regards,
R.N. Khola
Bandini,
Regarding the gratuity act, I have some queries:
1. Is the gratuity amount payable to an employee taxable or non-taxable?
2. In what cases can an employer get an exemption from this act (Payment of Gratuity Act)? Please provide some examples.
Regards, Bandini
From India, Delhi
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According to the clarification made by the members, income tax is not to be deducted on the gratuity amount received up to Rs. 3.5 lakhs. Please go through section 5 of this Act to have exemption from this Act. The Government of Haryana has given an exemption from the operation of the Payment of Gratuity Act, 1972 to the Haryana State Electricity Board in the year 2006/07.
With Regards,
R.N. Khola
Bandini,
Regarding the gratuity act, I have some queries:
1. Is the gratuity amount payable to an employee taxable or non-taxable?
2. In what cases can an employer get an exemption from this act (Payment of Gratuity Act)? Please provide some examples.
Regards, Bandini
From India, Delhi
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Dear All,
I need urgent assistance. As per my knowledge, an employee is entitled to gratuity upon completion of 5 years of service. I recently resigned (April 15, 2010) from my company where I had been employed since July 2003. When I joined, the company was a proprietary firm that received VC funding in December 2005, and EPF deductions began in 2006. Upon contacting the company for my gratuity payment, they informed me that gratuity would be calculated starting from when EPF deductions began, which would make me ineligible to claim gratuity. Currently, the company has approximately 50 employees.
I have been researching labor laws but could not find any clause linking gratuity to EPF. I would appreciate any guidance on this matter as I do not have any sources to help me.
I look forward to a response. Thank you in advance.
Regards,
Kooleo
From India, Mumbai
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I need urgent assistance. As per my knowledge, an employee is entitled to gratuity upon completion of 5 years of service. I recently resigned (April 15, 2010) from my company where I had been employed since July 2003. When I joined, the company was a proprietary firm that received VC funding in December 2005, and EPF deductions began in 2006. Upon contacting the company for my gratuity payment, they informed me that gratuity would be calculated starting from when EPF deductions began, which would make me ineligible to claim gratuity. Currently, the company has approximately 50 employees.
I have been researching labor laws but could not find any clause linking gratuity to EPF. I would appreciate any guidance on this matter as I do not have any sources to help me.
I look forward to a response. Thank you in advance.
Regards,
Kooleo
From India, Mumbai
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Dear Member,
Welcome to CiteHR. If this concern is covered under the Payment of Gratuity Act, 1972, then please go through section 4 for the calculation of gratuity for the employees.
R.N.Khola
From India, Delhi
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Welcome to CiteHR. If this concern is covered under the Payment of Gratuity Act, 1972, then please go through section 4 for the calculation of gratuity for the employees.
R.N.Khola
From India, Delhi
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Hi,
Calculation of Gratuity:
Gratuity = Current Monthly Salary (Basic + DA) x 15 x No. of yrs. of service / 26
Max. Gratuity payable under the Act is Rs. 3,50,000/-
15 - is known as 15 days' salary per year
26 - is known as workdays in a month
Thanks and regards,
Anil
From India, Mumbai
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Calculation of Gratuity:
Gratuity = Current Monthly Salary (Basic + DA) x 15 x No. of yrs. of service / 26
Max. Gratuity payable under the Act is Rs. 3,50,000/-
15 - is known as 15 days' salary per year
26 - is known as workdays in a month
Thanks and regards,
Anil
From India, Mumbai
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Please correct the maximum gratuity payable under the Payment of Gratuity act is not Rs 350000 but it is Rs 10 lakhs. Regards, Madhu.T.K
From India, Kannur
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From India, Kannur
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Hi,
1.If a person aged 60 years who’s getting retired and is working with the company for the past 1 .5 years -what would be the liabilities of the company towards the employee or what would be the employee benefits to be paid in this case- do we need to pay gratuity?
Anticiapting quick response.
From India, Hyderabad
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1.If a person aged 60 years who’s getting retired and is working with the company for the past 1 .5 years -what would be the liabilities of the company towards the employee or what would be the employee benefits to be paid in this case- do we need to pay gratuity?
Anticiapting quick response.
From India, Hyderabad
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For deciding whether or not an employee is eligible for gratuity under the Payment of Gratuity Act, the age of the employee is not the determining factor, but the length of his service is the determining factor. Therefore, if an employee is leaving the company after 1.5 years of service, he is not required to be paid any gratuity, even if he is aged 60 or older.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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Dear all,
I would like to supplement as follows:
Ceiling of Gratuity raised from 3.5 lacs to 10 lacs. Payment up to 10 lacs is a tax-free payment. Anything beyond this limit is taxable as the employer can pay more than 10 lacs as Gratuity payment.
Thank you,
R K Nair
From India, Aizawl
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I would like to supplement as follows:
Ceiling of Gratuity raised from 3.5 lacs to 10 lacs. Payment up to 10 lacs is a tax-free payment. Anything beyond this limit is taxable as the employer can pay more than 10 lacs as Gratuity payment.
Thank you,
R K Nair
From India, Aizawl
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Hi, I was working with a bank and left the job by serving a notice period of 12 days instead of 3 months. The Full and Final Settlement (FNF) sent by my company states that I need to pay some amount. The calculation was perfect but was based on the Gross income. Please correct me if I am wrong because, as per my knowledge, the calculation is done based on the basic salary.
Secondly, the bank credited the full amount of gratuity to my account, and then the bank debited my account for the recovery amount without my permission. Can the bank debit my account directly without my consent?
From India, New Delhi
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Secondly, the bank credited the full amount of gratuity to my account, and then the bank debited my account for the recovery amount without my permission. Can the bank debit my account directly without my consent?
From India, New Delhi
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Salary for the purpose of calculation of notice pay payable by either party need not necessarily be the basic salary alone, but it shall include all other fixed components which are paid if the employee is on duty or on leave. That means if there is a component which is paid purely based on attendance, then that can be excluded. Similarly, reimbursements may be excluded.
The bank is in error by collecting the notice pay from your gratuity amount because the gratuity amount is free from any lien, and the employer is not in a position to adjust any amount payable by the employee from the gratuity amount. This act of the bank management can be challenged.
Madhu.T.K
From India, Kannur
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The bank is in error by collecting the notice pay from your gratuity amount because the gratuity amount is free from any lien, and the employer is not in a position to adjust any amount payable by the employee from the gratuity amount. This act of the bank management can be challenged.
Madhu.T.K
From India, Kannur
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Sirs,
My name is Shailesh Vaishnav from Ahmedabad. I joined a company on 15.07.2011 and left on 15.06.2016. My question is whether I am entitled to receive gratuity. There are various discussions ongoing, so I have provided the exact dates of my service period. Based on this information, could anyone guide me?
Thanks,
Shailesh Vaishnav
From India, Ahmedabad
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My name is Shailesh Vaishnav from Ahmedabad. I joined a company on 15.07.2011 and left on 15.06.2016. My question is whether I am entitled to receive gratuity. There are various discussions ongoing, so I have provided the exact dates of my service period. Based on this information, could anyone guide me?
Thanks,
Shailesh Vaishnav
From India, Ahmedabad
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Hello sir,
I have worked in one engineering college for 5.8 years, 3.8 years on a fixed salary, and 2 years on payroll (6th pay scale). Am I eligible for gratuity? If yes, then how much amount can I get from the employer?
I resigned and was relieved in October 2015. When can I apply for it? My last month's salary details are as follows: BASIC 22250, DA 105%, grade pay 6000, gross 48800.
From India, Rajkot
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I have worked in one engineering college for 5.8 years, 3.8 years on a fixed salary, and 2 years on payroll (6th pay scale). Am I eligible for gratuity? If yes, then how much amount can I get from the employer?
I resigned and was relieved in October 2015. When can I apply for it? My last month's salary details are as follows: BASIC 22250, DA 105%, grade pay 6000, gross 48800.
From India, Rajkot
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc