Every salaried employee must have heard about gratuity, but not many of them might be aware of what is gratuity and how it is calculated.Every salaried employee must have heard about gratuity, but not many of them might be aware of what is gratuity and how it is calculated. Gratuity, in fact, is a retirement benefit which is usually payable at the time of cessation of one’s employment and on the basis of duration of service. It is a ‘gratuitous’ payment from an employer to an employee for the services rendered to the company, which is paid either at the time of retirement or when one leaves the organisation. Gratuity is payable in case of continuous service of 5 years or more, and as per the current laws, gratuity received up to Rs 20 lakh is exempt from tax.
1. Who is eligible for receiving gratuity?
As per the Section 3 of the Payment of Gratuity Act, 1972 (Gratuity Act), factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments with 10 or more employees are required to pay gratuity to their employees as per the provisions under the Gratuity Act. It is pertinent to note that once the employee strength reaches to 10 or more, employees are eligible to receive gratuity even if the strength subsequently goes below 10 at a later stage.
“Contract workers and temporary staff of an organisation are also eligible for the gratuity amount as long as they are considered its employees. However, apprentices are not eligible for gratuity. Employees on an overseas assignment or deputation are also eligible for gratuity as long as they are on the rolls of the company. The probation period is also taken into consideration while determining the number of years of one’s service,” says Akhil Chandna, Director, Grant Thornton India LLP.
Read more here https://www.financialexpress.com/mon...-know/1368801/
From India, Pune
31311. Who is eligible for receiving gratuity?
As per the Section 3 of the Payment of Gratuity Act, 1972 (Gratuity Act), factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments with 10 or more employees are required to pay gratuity to their employees as per the provisions under the Gratuity Act. It is pertinent to note that once the employee strength reaches to 10 or more, employees are eligible to receive gratuity even if the strength subsequently goes below 10 at a later stage.
“Contract workers and temporary staff of an organisation are also eligible for the gratuity amount as long as they are considered its employees. However, apprentices are not eligible for gratuity. Employees on an overseas assignment or deputation are also eligible for gratuity as long as they are on the rolls of the company. The probation period is also taken into consideration while determining the number of years of one’s service,” says Akhil Chandna, Director, Grant Thornton India LLP.
Read more here https://www.financialexpress.com/mon...-know/1368801/
From India, Pune
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