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Hi ALL,
In cases other than a government employee , gratuity is exempt on the following basis:
Any gratuity received under the Payment of Gratuity Act is exempt to the extent of the least of the following
*Rs 3,50,000
*15/26 x last drawn salary for every completed year of service or part of the year in excess of six months, or
*Gratuity actually received
Salary for this purpose means basic salary and dearness allowance.
Any other gratuity received by employee/legal heirs on retirement, termination of services, death, etc., is exempt to the extent of the least of the following:
*Rs 3,50,000
*Half month's salary (on the basis of last 10 months average) for each completed year of service (fraction to be ignored)
*Actual gratuity received
Salary for this purpose means basic salary, dearness allowance, if provided in terms of employment, and commission as a percentage of turnover achieved by the employee.
Where a person is covered by the Payment of Gratuity Act, the exemption is available only if he has rendered a continuous service for a period of five years, except where the cessation of employment is due to death or disablement of the employee.
Also according to the Income Tax Act 1961 If the company is covered under Payment of gratuity Act then the Days/Month Fraction is added as a next year. Hence the 240 days comes into contention when calculating the gratuity amount. Thus if the person has completed 240 days in the last year of employment then it must be counted as the next year, if less than 240 days in the last year of employment then it has to be the previous year. For eg: 6 yrs 241 days is 7 yrs and 6 yrs 200 days is 6 years.
Also the year is calculated from his joining date for eg: 1-5-1999 to 30-4-2000 would be a year.
Hope the above is sufficient msg or post in case of queries.
Regards,
AJ
From India, Thana
In cases other than a government employee , gratuity is exempt on the following basis:
Any gratuity received under the Payment of Gratuity Act is exempt to the extent of the least of the following
*Rs 3,50,000
*15/26 x last drawn salary for every completed year of service or part of the year in excess of six months, or
*Gratuity actually received
Salary for this purpose means basic salary and dearness allowance.
Any other gratuity received by employee/legal heirs on retirement, termination of services, death, etc., is exempt to the extent of the least of the following:
*Rs 3,50,000
*Half month's salary (on the basis of last 10 months average) for each completed year of service (fraction to be ignored)
*Actual gratuity received
Salary for this purpose means basic salary, dearness allowance, if provided in terms of employment, and commission as a percentage of turnover achieved by the employee.
Where a person is covered by the Payment of Gratuity Act, the exemption is available only if he has rendered a continuous service for a period of five years, except where the cessation of employment is due to death or disablement of the employee.
Also according to the Income Tax Act 1961 If the company is covered under Payment of gratuity Act then the Days/Month Fraction is added as a next year. Hence the 240 days comes into contention when calculating the gratuity amount. Thus if the person has completed 240 days in the last year of employment then it must be counted as the next year, if less than 240 days in the last year of employment then it has to be the previous year. For eg: 6 yrs 241 days is 7 yrs and 6 yrs 200 days is 6 years.
Also the year is calculated from his joining date for eg: 1-5-1999 to 30-4-2000 would be a year.
Hope the above is sufficient msg or post in case of queries.
Regards,
AJ
From India, Thana
Hi AJ,
I need a bit more clarification about the 240 days part in your post.
If I have completed 4 full years of service and have completed 240 days in the 5th year, after which I leave the organisation, I will be eligible for gratuity right?
Does this 240 days exclude or include weekly offs, paid leave and public offs?
Thankyou for your time in advance.
Emereen
From India, Mumbai
I need a bit more clarification about the 240 days part in your post.
If I have completed 4 full years of service and have completed 240 days in the 5th year, after which I leave the organisation, I will be eligible for gratuity right?
Does this 240 days exclude or include weekly offs, paid leave and public offs?
Thankyou for your time in advance.
Emereen
From India, Mumbai
Hi Friends, Yes Gratuity limit is for 3,50,000/-. But you can pay more as Ex-gratia. Sixth Central Pay Commission has requested Govt to increase this limit upto 10 lacs. Thanks
From India, Vadodara
From India, Vadodara
Hi emereen,
If you have completed 4 years and 240 days, you do become eligible for gratuity.
The 240 days includes weekly off's and goverment of public holidays since they are considered to be working days by the companies registered under the gratuities act.
The following are the terms and definitions of "continuous service"
"Continuous Service" means uninterrupted service and includes service which is interrupted by sickness, accident, leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employees concerned, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
Explanation I.- In the case of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than-
You can follow this link for further legal proceedings that have been undertaken by individuals.
Gratuity Act 2000 <link updated to site home> ( Search On Cite | Search On Google )
Hope the above was sufficient.
Regards,
AJ
From India, Thana
If you have completed 4 years and 240 days, you do become eligible for gratuity.
The 240 days includes weekly off's and goverment of public holidays since they are considered to be working days by the companies registered under the gratuities act.
The following are the terms and definitions of "continuous service"
"Continuous Service" means uninterrupted service and includes service which is interrupted by sickness, accident, leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employees concerned, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
Explanation I.- In the case of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than-
(i)
190 days, if employed below the ground in a mine, or (ii)
240 days, in any other case, except when he is employed in seasonal establishment. Explanation II.- An employee of a seasonal establishment shall be deemed to be in continuous service if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during the year. [Section 2(d)].(d)
"Controlling authority" means an authority appointed by an appropriate Government under section 3. [Section 2(d)].(e)
"family", in relation to an employee, shall be deemed to consist of-(i)
in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependant parents and the widow and children, of his predeceased son, if any, (ii)
in the case of a female employee, herself, her husband, her children,You can follow this link for further legal proceedings that have been undertaken by individuals.
Gratuity Act 2000 <link updated to site home> ( Search On Cite | Search On Google )
Hope the above was sufficient.
Regards,
AJ
From India, Thana
Dear Seniors
i want to know what is the formality to register some company under gratuity act . when we can send some one form F.Is there any time limit or not. is there any return related to gratuity act
for yours kind response
paveen
From India, Chandigarh
i want to know what is the formality to register some company under gratuity act . when we can send some one form F.Is there any time limit or not. is there any return related to gratuity act
for yours kind response
paveen
From India, Chandigarh
Hi Friends,
I am agree with Mr.Surender's reply. Further, max limit of gratuity is INR 350,000/- however, if more than this amount also may be paid if employer agree, but IT will attract for amount above 350000/-
Deepak
From India, Kolhapur
I am agree with Mr.Surender's reply. Further, max limit of gratuity is INR 350,000/- however, if more than this amount also may be paid if employer agree, but IT will attract for amount above 350000/-
Deepak
From India, Kolhapur
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc