Hello evryone,
i am working in one manufacturing unit. and i have one question, one of our employee dies during employment with us and as per law we have to pay him gratuity but my question is whether we have to pay for his completed years of services or for remaining years of service also??
his total years of employment is 7 yrs. on march 2013
put your efforts on this.
Regrds,
sachin
From India, Vadodara
3i am working in one manufacturing unit. and i have one question, one of our employee dies during employment with us and as per law we have to pay him gratuity but my question is whether we have to pay for his completed years of services or for remaining years of service also??
his total years of employment is 7 yrs. on march 2013
put your efforts on this.
Regrds,
sachin
From India, Vadodara
Dear Patel,
Kindly go through Section 4 of the Payment of Gratuity Act,1972 which define terms of payment of gratuity: -
Section 4. Payment of Gratuity.-
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,-
(a) on his superannuation, or
(b) on his retirement or resignation,
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to
death or disablement:
1[Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his
heirs, and where any such nominees or heirs is minor, the share of such minor, shall be deposited with the Controlling Authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority].
Explanation.- For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of
performing before the accident or disease resulting in such disablement.
Attribute: http://www.mahashramm.gov.in/maha/ac...y_Act_1972.pdf
Thanks
From India, Jaipur
Kindly go through Section 4 of the Payment of Gratuity Act,1972 which define terms of payment of gratuity: -
Section 4. Payment of Gratuity.-
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,-
(a) on his superannuation, or
(b) on his retirement or resignation,
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to
death or disablement:
1[Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his
heirs, and where any such nominees or heirs is minor, the share of such minor, shall be deposited with the Controlling Authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority].
Explanation.- For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of
performing before the accident or disease resulting in such disablement.
Attribute: http://www.mahashramm.gov.in/maha/ac...y_Act_1972.pdf
Thanks
From India, Jaipur
Dear Sachin,
As per section 4(2), you have to pay gratuity for 7 years service only which are completed years of service. This section says:
"(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the wages last drawn by the employee concerned";
Thanks
V K Gupta.
From India, Panipat
As per section 4(2), you have to pay gratuity for 7 years service only which are completed years of service. This section says:
"(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the wages last drawn by the employee concerned";
Thanks
V K Gupta.
From India, Panipat
Dear
I appreciate the contents of Mr Surendra. Only thing I would like to add is that, now-a-days, some companies have tied up with Insurance providers like LIC, ICICI or any other, who reimburse the payment of gratuity paid to the nominees of employees after death. In such cases, employers have adopted some formula to pay gratuity for the period of service rendered as well as gratuity for the remaining period of service lost due to death. The whole amount in such cases is reimbursed by the Insurance providers who charge some premium every year for such insurance of gratuity cover. You have not mentioned what is the practice in your organization. If no such arrangement has been made, gratuity shall be paid only for the period of rendered service as per provisions of PG Act.
Best Wishes
AK Jain
HR Personnel
NCL, CIL
From India, Jabalpur
I appreciate the contents of Mr Surendra. Only thing I would like to add is that, now-a-days, some companies have tied up with Insurance providers like LIC, ICICI or any other, who reimburse the payment of gratuity paid to the nominees of employees after death. In such cases, employers have adopted some formula to pay gratuity for the period of service rendered as well as gratuity for the remaining period of service lost due to death. The whole amount in such cases is reimbursed by the Insurance providers who charge some premium every year for such insurance of gratuity cover. You have not mentioned what is the practice in your organization. If no such arrangement has been made, gratuity shall be paid only for the period of rendered service as per provisions of PG Act.
Best Wishes
AK Jain
HR Personnel
NCL, CIL
From India, Jabalpur
Suppose an employee has completed 10 yrs. and expires while on employment.
His gratuity will be calculated for 10 served year or upto his retirement age i.e. 58 Yr.
I think gratuity upto 5Lacs is non taxable. Suppose gratuity amount for an employee comes more than 5 Lacs will the tax will be attracted on excess amount even he is expired.
Is there any relaxation in death cases.
From India, Jaipur
His gratuity will be calculated for 10 served year or upto his retirement age i.e. 58 Yr.
I think gratuity upto 5Lacs is non taxable. Suppose gratuity amount for an employee comes more than 5 Lacs will the tax will be attracted on excess amount even he is expired.
Is there any relaxation in death cases.
From India, Jaipur
Dear Arun jain,
yes, we have tie up with LIC for gratuity bt we have entered into contract with LIC on 1/4/13 and unfortunately employee died on the 31/03/2013. so for LIC it should not covered, we have to pay him gratuity from our side.
that why this question raised in my mind.
From India, Vadodara
yes, we have tie up with LIC for gratuity bt we have entered into contract with LIC on 1/4/13 and unfortunately employee died on the 31/03/2013. so for LIC it should not covered, we have to pay him gratuity from our side.
that why this question raised in my mind.
From India, Vadodara
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