Hi all,
Firstly: As I understand, that there is no employee contribution towards gratuity; only the employer contributes: correct?
Secondly: If Gratuity is shown as part of CTC, then notwithstanding the fact that it cannot be drawn before 5 years as per the Act, is the company liable to pay it annually? You see, if it cannot be drawn annually then in this case the major benefit is solely to employer for tax relief.....as the employee has to then stick for 5 years before he can ask for it.
Kindly clarify both points.
Regards,
Brandon
From India, Calcutta
4Firstly: As I understand, that there is no employee contribution towards gratuity; only the employer contributes: correct?
Secondly: If Gratuity is shown as part of CTC, then notwithstanding the fact that it cannot be drawn before 5 years as per the Act, is the company liable to pay it annually? You see, if it cannot be drawn annually then in this case the major benefit is solely to employer for tax relief.....as the employee has to then stick for 5 years before he can ask for it.
Kindly clarify both points.
Regards,
Brandon
From India, Calcutta
There is no employees contribution to gratuity. Gratuity is not a contribution Fund like Employees Provident Fund.
Showing the gratuity as part of CTC is a new trend but it cannot be paid monthly or annually. It becomes payable only when an employee leaves after serving for at least 5 years. No employer can say in advance that a particular employee will serve him for 5 years. Therefore, the gratuity accrues only after 5 years.
Regards,
Madhu.T.K
From India, Kannur
Showing the gratuity as part of CTC is a new trend but it cannot be paid monthly or annually. It becomes payable only when an employee leaves after serving for at least 5 years. No employer can say in advance that a particular employee will serve him for 5 years. Therefore, the gratuity accrues only after 5 years.
Regards,
Madhu.T.K
From India, Kannur
Thanks for the clarification. Also, I understand that Gratuity is not taxable in any case even if it is shown as a component of CTC? Is that correct? Regards, Brandon
From India, Calcutta
From India, Calcutta
Hi Madhu,
I agree to you that Gratuity is paid after 05 years of service ( continous service ) in on company, then the employee is eligible for gratuity.
But , if it is included in CTC PART, then employer has to pay Gratuity when the employee leaves the organisation, even if employee has not completed 05 years of service.
Regards,
Nimish Joshi
9969526325
From India, Mumbai
I agree to you that Gratuity is paid after 05 years of service ( continous service ) in on company, then the employee is eligible for gratuity.
But , if it is included in CTC PART, then employer has to pay Gratuity when the employee leaves the organisation, even if employee has not completed 05 years of service.
Regards,
Nimish Joshi
9969526325
From India, Mumbai
Dear Nimish,
Even if the gratuity is shown as part of CTC, the employee will not get it if he leaves before 5 years of continuous service. The qualifying phrase ' continuous service' will not be applicable if the employee dies and in such case the employer has to pay gratuity to the nominee even if the deceased employee had not put in 5 years of service.
Regards,
Madhu.T.K
From India, Kannur
Even if the gratuity is shown as part of CTC, the employee will not get it if he leaves before 5 years of continuous service. The qualifying phrase ' continuous service' will not be applicable if the employee dies and in such case the employer has to pay gratuity to the nominee even if the deceased employee had not put in 5 years of service.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu, Can we pay gratuity in a monthly allowlance as "Special Allowlance"?? Please clear my doubt. dsv
From India, Delhi
From India, Delhi
pls yarif gratuity is dedecuted from CTC and if i leave my organisation within 1 or 2 years i am should get back my money na , as i have not completed 5 years ?Rajeev
From India, Bangalore
From India, Bangalore
Dear All,
Few Clarifications
1. Gratuity is shown in CTC because company wants to realise its additional cost towards employee, in case he completes 5 years
2. Gratuity is also shown in CTC to increse CTC figures on papers to fight competition. For example, few companies also show cost of trainnings in CTC that the employee would be receiving year on year
3. Gratuity is a compulsory contribution from employer's pocket and by no means employee can pay it
4. Gratuity can not be shown in "Pay Slip"
5. Gratuity can be claimed only if an employee completes 5 years service without breaks
6. Gratuity can not be shown under head of any other allowance
From India, Hyderabad
Few Clarifications
1. Gratuity is shown in CTC because company wants to realise its additional cost towards employee, in case he completes 5 years
2. Gratuity is also shown in CTC to increse CTC figures on papers to fight competition. For example, few companies also show cost of trainnings in CTC that the employee would be receiving year on year
3. Gratuity is a compulsory contribution from employer's pocket and by no means employee can pay it
4. Gratuity can not be shown in "Pay Slip"
5. Gratuity can be claimed only if an employee completes 5 years service without breaks
6. Gratuity can not be shown under head of any other allowance
From India, Hyderabad
Dera DSV
Spl Allow. is called in CTC scale is
Spl Allwance = CTC - (Bsic + HRA + all allowances)
the remaing balace is called as a Spl Allow.
Garatuity eligibilty is 5 years, there is no chance to pay gratuiry as a spl. allowance.
From India, Hyderabad
Spl Allow. is called in CTC scale is
Spl Allwance = CTC - (Bsic + HRA + all allowances)
the remaing balace is called as a Spl Allow.
Garatuity eligibilty is 5 years, there is no chance to pay gratuiry as a spl. allowance.
From India, Hyderabad
Dear All,
Thanks for the valuable information.
Was haiving 2 queries..
1. With whom is amount of gratutiy contributed by the employer kept / deposited with?
2. What is done with the amount of Gratuity accumulated in case of an employee who leaves the organistion before completion of 5 yrs.
Swati
From India, Bangalore
Thanks for the valuable information.
Was haiving 2 queries..
1. With whom is amount of gratutiy contributed by the employer kept / deposited with?
2. What is done with the amount of Gratuity accumulated in case of an employee who leaves the organistion before completion of 5 yrs.
Swati
From India, Bangalore
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