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Assume there are some arrears outstanding. The employee has requested a gratuity advance with consent. The employee intends to use this gratuity advance to clear the arrears. When it comes time to pay out the gratuity, the question arises: can we deduct the amount previously taken as a gratuity advance and then pay out the remainder of the gratuity amount?

Please advise.

From India, Kannur
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It is better not to make it official. Therefore, in the gratuity payment order (in Form L sent to the employee), you should show the full amount as payable and separately deduct the amount paid as gratuity advance as a general advance. Do not show it as a gratuity advance but just as an advance or general advance, which can obviously be deducted from the full and final payment due to the employee.

Madhu.T.K

From India, Kannur
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