Gratuity is that part of the salary of an employee when he received to employer.
When leaving job.
The payment of Gratuity act, 1972.means any person employed on wages in any establishment factory,mine, oilfield, plantation, port, railway company or shop or establishment in state which 10 or more persons are employed on any day of the preceding 12 months.
Central Government- such other establishment or class of establishment in which 10 or more employees are employed on day preceding 12 months
It shall come force on such data as the Central Government may, by notification
Gratuity means Gift or Token of employer
Payment of Gratuity
If he completed 5 year of continuous services
(D) On this death or disablement to accident or disease shall not necessary where the termination of the employment of any employee is due to death or disablement. Provided further in case of death of the employee Gratuity payable to him shall be paid to his nominee or nomination has been made to heirs is minor. The share off such minor shall be deposited with the Controlling Authority who shall invest the same for the benefit other financial institution as may be prescribed attains majority.
(1) all the employers must an insurance from the Life Insurance Corporation or any other prescribed their liability of payment of Gratuity
(2) if the employee ha already established an approved gratuity fund he maybe exempt from section (1)
(3) the employer shall get company registered with the Controlling Authority within time
(4) appointment of the Bord of trustees by the appropriate government
(5) every employer shall be liable to pay the contribution by way of premium to approve gratuity fund
(1) the employee must appoint a nominee
(2) the employee can distribute the gratuity in more than one nominee
(3) if the employee has a family then he should nominate any of the family members and not a outsider
(4) nomination can modify and when by the employee
(5) if the nominee the employee he has to make a fresh nomination
(6) every change in the nomination has to be employer which must be kept in a safe custody .
(A) A person eligible for gratuity shall give in writing to the employer
(B) The employer shall determine the amount of gratuity and give a notice in writing to employee to receive the gratuity when due.
(C) The employer shall the make the Gratuity payment within 30 days to due.
(D) Amount is not paid during the specified time by the employer, he shall pay a simple interest for the delayed time at rate as the government,
(E) any dispute regarding amount of gratuity or the person receiving Gratuity shall be paid the Controlling Authority.
(F) any aggrieved party can make an appeal to the appropriate government within 60 days from receipt of orders.
Appointment power of Inspector- appropriate government can appoint as enquiry. The have the power to conduct investigation collect evidence require to produce the copies.
Recovery of Gratuity
The controlling authority on application from the aggrieved party issue a Certificate to the collector to recover the amount of Gratuity payable from the employer along with the compound interest.
Making false statements or false representation- Imprisonment 6 months
Fine upto 10,000 or both
Any contravention of provision by employer
Imprisonment 6 months
Fine upto 20,000 or both
Income tax on gratuity received
The gratuity received by any government employee wholly exempt
AMENDMENTS as 2018
Incase of Government servants the upper ceiling on gratuity has been increased from 10 lakhs to 20 lakhs.
Considering inflation wages increase of employees of private sector maximum extent 20 lakhs.
In case any requirement related to Actuarial valuations in compliance of AS 15 (Revised 2005)/IndAS 19/IAS 19. In case of more details in the above matter you may contact me at 9716647377 or firstname.lastname@example.org