Cabinet approved amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh to Rs 10 lakh
The Cabinet on Thursday approved an amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh to Rs 10 lakh. The Bill to amend the Act will now go to Parliament, a government official told.
Every salaried person, who has completed five years of government or private sector service, is eligible for half a month’s salary as gratuity for every completed year of service. But the gratuity pay of those with higher salaries is now limited at Rs 3.5 lakh. The proposed amendment raises this to Rs 10 lakh. Every employer with more than ten salaried workers is mandated to provide gratuity to the eligible employees. Many companies, however, do not keep the gratuity liability adequately funded. That is, they make provisions for future payment, but do not set aside funds towards the future payment. Listed companies are expected to disclose their gratuity liability.
Download Payment of Gratuity Amendment Bill 2010
Related Post:-
1. Cabinet approved amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh to Rs 10 lakh
2. Lok Sabha passes bill to hike gratuity ceiling to Rs. 10 lakh from Rs. 3.50 Lakh
3. Gratuity Limit increased to 10 Lakh as per Income Tax Act and Gratuity Act in Rajya Sabha
With reference to Mr G.Laxminarasimhulu’s message, I am a private sector employee retired on 3.6.2009
Mr K.A.Salian
A/402 Shiv Surbhi Apt
Thakur Village
Kandivli (E)
Mumbai 400101
Mobile: +91 9820253046
Landline: 022 66400279
Email:krishnappa.salian@yahoo.in
This is response to Mr G.Laxminarasimhulu’s message. I am a private sector employee retired on 3.6.2009. My contact details are as under:
Mr K.A.Salian
A/402 Shiv Surbhi Apt
Jivlapada, Thakur Village
Kandivali (E)
Mumbai 400 101
Mobile:+91 9820253046
Landline: 022 66400279
E-mail:krishnappa.slian@yahoo.in
The contents of the 4 page petition drafted can not be placed here, hence I request all the retirees to act quickly and send the aabove details. If need be contact
over phone given above.
G.Laxminarasimhulu
Dear retirees,
Kindly send all your email & contact addresses as a detailed petition is being submitted to Committee on petions of Rajyasabha, for taking up the matter at appropriate level for removal of discrimination & injustice of making Gratuity applicability from different dates to retirees of centrl Government & others. The response is very very positive. Hence, I request all the CPSE retirees from BHEL,ONGC,HPCL,IOC etc. to quickly respond sending the above to the mail id gln30514@yahoo.co.in (M no.9849804933 Land Line Residence 040-40146759 so that further details and action plan can be shared in this regard.
G.Laxminarasimhulu
One of the retired victim.
sir please send me latest ammendments in in Gr. act.
regards
praveen
On the last day of every month when ever we open the news papers we find advertisements on “Superannuation wishes” and “Retirement greetings”. But unfortunately for employees retired between 01.01.2006 to 23.5.2010,it has become a day of CONDOLENCES due to discriminatory implementation enhanced Gratuity Act w.e.f 24.05.2010. The wounds inflicted by the amendment are becoming deeper and deeper as the days pass on, due to callous attitude of employees representative unions/by law makers, towards the issue. The cost of living is increasing day by day living the lives of the retiree families to market forces. Gratuity lost gratitude.
Sastry
It is quite unjustified and injustice to those who have retired from PSU & Banks between 01/01/06 to 24/05/2010 if the enhancement of gratuity limit from 3.5 lakh to10 lakhs given to the central & state govt.retired employees is not paid to them.it appears that enhancement of gratuity limit from 24/05/10 for a group of employees shows malafied intentions of the ruling party and is not going to help them in the long run.Please do not force the employees to go to the court of law and be kind enough to deliver the justice to them by amending the implementation date of the gratuity act 2010 with retrospective effect from 01/01/06 instead of 24/05/10 before coming festival season.Hope Union govt. will review the sentiment of retired employees and reconsider the effective date.
all of u above
1). please make a website regarding this and collect your phone numbers and addresses so that u can all fight collectivily and
2). stop shouting and do some social work and collect some money and do some act of co-ordiante make a common cometee and apeal to govt collectively
3) remember if u get collected then only u will get 10 lakhs no other ways.
regards and don’t just shout.
this is wrong act
Except that some people have made appeals, it appears that there is no strong follow up from any level,on the subject matte,as it has effected only retirees.Even the retires were staying in different places. c.. It was only due to very strong public opinion that there is discrimination between government employees and PSU/Private employees that Government was persued to issue this ordinance for existing employees. Not even a single soul has raised the issue in the monsoon session of the parliament.The only alternative we feel is that in case some senior leaders in GOVT are contacted personally by some group and raise the issue so that government may at least think about the same.The Govt took two years to get the bill passed in Lok Sabha. The recent salary increase to our Hon M.Ps’ is with retrospective effect.Hence the effective date at least be requested to be made date of putting the bill before the Parliamentary Committee.
Sastry
Dear Honourable Labour Minister Mr. Mallikarjun Kharge,
Subject:- Effective date of gratuity amendment act 2010 for private sector employees
It is painful to note that you have deviated from the practice of amending labour acts for private sector, PSU and Govt employees while notifying the effective date of Gratuity act 2010. By this you have discriminated the private sector retired employees causing huge loss to the old people.
Now there are three effective dates-
1)For Govt employees from 01-04-2006
2)For PSU employees from 01-01-07
3)For Private sector employees from 24-05-10
I do not want to put arguments before you to substantiate my grievance as I am seeking only for natural justice-treat all employees equally before law as done earlier. Therefore, I request you to come out with a gazette notification making the effective date from 01-04-2006 and treat all employees as equals before law.
I am also from Karnataka and you have stated recently in Karnataka that the effective date is changed to 01-01-2007 and, if it has to be made effective from 2206 you need to discuss with the employers group. But, I am made to understand that the effective date for private sector remains as 24-05-10 without an change. If you had the intention to change it to 01-01-07 for private sector employees also, I request you to amend the effective date immediately to help them.
Affordabilty is not at all a factor for private sector employers in India as all the private sector businesses made year –on-year increased profits even during the peak global recession time; and, they took advantage to issue massive pink slips to their employees during that period. I am confident that you would agree with me if I say that our govt treasury is not running on surplus annual budgets to become more compassionate to their employees. This shows that you have got the intent to make it retrospective as done in the earlier amendments of the act . Unfortunately you missed out to extend the same to other employees.
I once again request you to correct the anomaly immediately.
Please revert.
Best regards
M.S.S.Jalaludin
Retired Employee from Private Sector on 01-06-2008
I retired from a Public Sector Undertaking on 31st January, 2010.Not only employees of our company but also employees of other PSUs who retired from 1 Jan., 2007 to 30th April, 2010 got gratuity at the enhanced rate i.e. Rs. 10 Lakhs as per guidelines of DPE. I also got gratuity of Rs. 10 lakhs but employers has deducted the income tax on the difference of gratuity i.e. 6.50 lakhs as per provisions of Income Tax Rules. Govt. employees are getting exemption from Income Tax on grautity of Rs. 10 Lakhs. w.e.f. 1.1.2006. As per recently amended Gratuity Act, non-govt.employees will get income tax exempted gratuity upto Rs. 10 Lakhs w.e.f. 23th May, 2010. It is said all are equal before the Law. But it seems that Govt.employee and non govt. employee are not equal before the Law of Indian Income Tax. Why this type of difference is being created? Is it not a violation of Law of Equality? All the members of Parliament, have raised their salary and Pension Benefits. Why they are not putting any question in the parliament in this regard?
We request, Hon’ble PM, FM and Labour Minster to take care of employees retired from 1.1.2007 to 23rd May, 2010 and issue a suitable notification exempting the gratuity upto Rs. 10.00 Lakhs from income tax in respect of those effected thousands non govt.employees.
Regards & Thanks,
I would like to know whether the gratuity calculation is done on monthly basic salary or yearly basic salary.
For example:
Monthly basic salary * 15/26 * number of years of service
or
Yearly basic salary * 15/26 * number of years of service
Thanks
Good Monrning
Is PF withdraw money taxable? if yes what is the condition.
retired frm a psu on 31/05/2010 and recd rs 3.5 laks.should eligible for revised gratuity
Every one is taking of cent.govt. and PSU employees . There is one PSU disinvested in 2001 with 49% shares still with GOI AND 51% WITH PVT.PARTNER with management control. Pvt.partner is paying gratuity without ceiling i.e.beyond 3.5 lakhs. However for employees working since PSU days are paid as per ceiling limit of 3.5lakh.The increased amount is applicable wef 24/5/2010 saying that PSU rules are applicable. As per DPE notification ,increase amount rule is implemented wef 1/1/2006 or 1/1/2007 depending on DA pattern .I s it justified? Then what is benefit of disinvestment ? GOI has 3 directors on board of BALCO,and they should take care of old employees after disinvestment.They should also visit area and talk to old employees about their conditions after disinvestment without looking at only balance sheet at Delhi.
Now what will be the rule in BALCO,(BHARAT ALUMINIUM COMPANY LTD.) after disinvestment for old employees working since PSU days.
Central Govt. employees are eligible for tax exemption on gratuity of 10 lakhs right from 1.1.2006. The CPSU employees were eligible for 10 lakh gratuity w.e.f. 1.1.2007. Those retired PSU employees from 1.1.2007 to 23.05.10 are unfortunate ones, they are not getting tax exemption on 6.5 lakhs. Is this justice? When the Govt. wastes money on NREGA from honest taxpayers contribution and there are massive corruption there, why can’t the tax exemption be given from retrospective effect? This is height of insensitivity.
AFTER READING Sri.D.V.Raja Rao trailing e mail,I venture to substantiate here the simple reasons & need to extend the enhanced limit of 10 lakhs in Gratuity to BANKING sector retirees & resignees between 1.1.06 and 24.5.2010.
(a).Every employee invariably becomes a B.P & Sugar patient by the time he reaches superannuation in Banking industry. Since these twin problems require life long treatment, the enhanced gratuity will help to purchase daily medicines. No employee will able to enter Forbes list of Billionaires with gratuity amount.Hope these two SIMPLE reasons will help the GOVT to take a quick decision…..
I substantiate here the need to extend the enhanced limit of 10 lakhs in Gratuity to other sectors as given to Govt Sector for retirees & resignees between 1.1.06 and 24.5.2010 as conveyed by Mr Pranab Ghosh on 2/7/10 & Mr S. SIVARAMAKRISHNAN on 26/5/2010 in their trailing e-mails.
The self-benefiting law was drafted by Govt Officials and approved by Govt to benefit themselves and their colleagues/constituents, most of them go scot-free taking bribes. Whatever they are getting as enhanced Gratuity is addition to what they earn as bribes from Banks and other entities who are forced to pay bribes to get their jobs done by Govt Deptts.
Whereas over 80% in PS Banks and Private Sector are honest, more than 80% are corrupt in Govt Deptts and still the Gratuity act is in favour of the Govt employees.
As a Public Sector Bank Branch Manager I used to approach the Distt Level Officials for deposits for my branch.
One official of Zilla Parishad Korba said: Mera Khyal Rakhna.
Another employee of the same Zilla Parishad sent message through another branch manager of my bank to give gifts to him in order to get deposits from Zilla Panchayat, Korba
An Govt official in Nellore Distt of Andhra Pradesh handling Water Shed Funds asked me Rs.10,000/- as bribe for the accounts opened in my rural branch by the beneficiaries (belonging to our branch’s service area) of Water Shed Funds.
An accountant, Mr Gupta, of Municipal Commissioner’s Office Korba asked me Rs.7,000/- for his commissioner Mr Mishra in 2006-07.
The officials(a chief Manager and a zonal manager) of my Public Sector Bank, stationed in Raipur, spoke to me (in Korba) over phone and said the following in the last week of March 2006 in reply to what I said to them : the Govt Officials are asking gifts in return for their Deptt’s deposits for my bank.
The chief manager said : you give gifts.
The zonal manager said: whatever you said to the chief manager, if you do not increase deposits, i will transfer you. This is nothing but a threat conveying consequences if I do not grow deposits whatever be the methods.
Because such systems exist in Govt Deptts and PSUs, a customer of my Public Sector Bank, Mr Dinesh Kedia who runs a printing press in Korba and gets his jobs from Govt Deptts, said in my cabin(branch manager’s cabin of the PS Bank): “Imaandaar aadmi bekar aadmi hain. vo hamaara kamke nahi hain”. He also said on another occasion: even though his relative was a minister in Chhattisgarh State, he was not using the Minister’s influence but uses method of bribing to get Govt business because ministers come and go but they have to do business life long.
Such Govt employees are getting the amended Gratuity benefit from back date whereas the rest of the uncorrupt employees of PSBs and Private Sector have to settle for the Gratuity wef 25.4.10.
When the working in Govt Deptts and my ex-PS Bank is substandard, one cannot expect their planning and thinking any better.
Govt should have some shame and immediately set right the anomaly that is created in the effective date for the Gratuity benefit amendment extended to the Govt employees and the PSBs & Private sector employees.
Hope conscience prevails.
It is very shame for the democracy that some Medical Doctors of National Institute of Homeopathy,Kolkat(Medical Officers and Asst.Research Officers)are not getting their Dynamic ACP after 25 years service.Some states like Orisa, Keral, tamil Nadu and Delhi this Dynamic ACP already implemented in relatyion to the AYUSH’s Office order but not implemented in N.I.H.Some seniors doctors already retired from service with empty hand(without service beifit.)So if it is Implement in National Institute of Homeopathy then these doctors will hold their prestige and safe from moral degredation.
The Monsoon session of Parliament is likely to start shortly. Are there any Hon.M.Ps interested in raising the issue and solving the problem. People who retired after 24.05.2010 have started expressing their sympathy to employees retired prior to 24.05.2010. See how policy decisions create divisions. See All banking solutions sight on this subject.
I retired from Enginers India Ltd., Delhi, a Govt. of India Enterprise on 31.05.2009.I retired as Dy.GM.I was in CDA scale of pay at the time of my retirement.I have been paid Gratuity of Rs.3.5 Lakhs only.I have been sending e-mails to my ex-Employer to pay the remaining amount of Gratuity.But there is no response.Kindly advise whether I am entitled to get the balance gratuity or not.
It is quite unjustified and injustice to the senior citizens of India who have retired from PSU & Banks between 01/01/06 to 24/05/2010 if the enhancement of gratuity limit from 3.5 lakh to10 lakhs given to the central & state govt.retired employees is not paid to them.Hope Union govt. will review the sentiment of senior citizens and reconsider the effective date.
The ruling Govt. has shattered the hopes of the retired employees from 01.01.2006 to 23.05.2010. Is it true justice if you have 2 effective dates for the Gratuity Act i.e. 1.1.2006 for Central Govt. employees and the other as 24.05.2010 for the others including Central Govt. PSU’s? Aren’t we all equals in the eyes of God and so our Hon. President & PM who lead this country with our help should have thought of treating us all as EQUALS and made the effective date of Gratuity as 01.01.2006 for ALL. Please help us to serve the nation from further damage looking to the rise in prices of each and every commodity. Where is your aam aadmi agenda? Isnt this like wishful thinking? I dont think this blog will have much impact on the Govt. as they are here only for the rich and the greedy.
What is the effective date for Gratuity Act 2010 for Co-operative urban bank employees?
I have worked in GLAND PHARMA LIMITED,6-3-862,AMEERPET, HYDERABAD-500016 for more than 7 years but the company is not giving the gratuity amount,
although in my appointment letter gratuity was mentioned .
Pl suggest.
i took VRS on Medical ground and left the service on 15 th April 2010. While taking decision I have considered Gratuity enhancement of Rs.10 Lakhs. I am working in BEML , a PSU which is under the ministry of defence. While Giving approval DPE issued guidelines that the effective date revision will be 01.01.2007. It had been told to us by the management that it awaits amendement in act. Kindly let me know whether I am eligible for revised gratuity.
I do not know if writing on this site will be of any use. All of us who are sufferers are only talking to one another. The govt. has done the harm already by not revoking the date of implementation of 24 May 2010 for tax frr gratuity. We need to take our voice to parliament, MPs, IT department, Finance Ministry etc. which matter. Writing here does not serve any purpose.
I would request the Hon’ble Prime Minister, WHO IS WELL-KNOWN FOR HIS HONESTY AND JUSTICE, to change the date of effect TO 01.01.2006 to maintain the parity at least for those public sector enterprises, Banks etc. who have adequate funds/provisions otherwise this will be treated as a great injustice to the Employees who retired between 01.01.2006 to 24.05.2010 and a severe jolt to their expectations as well.I beleive the Govt.would consider this sympathetically.
H.S.SETHI
I would request the Hon’ble Prime Minister WHO IS KNOWN FOR HIS HONESTY AND JUSTICE, to change the date of effect TO 01.01.2006 to maintain the parity at least for those public sector enterprises, Banks etc. who have adequate funds/provisions otherwise this will be treated as a great injustice to the Employees who retired between 01.01.2006 to 24.05.2010 and a severe jolt to their expectations as well.I beleive the Govt.would consider this sympathetically.
H.S.SETHI
I would request the Hon’ble Prime Minister WHO IS KNOWN FOR HIS HONESTY AND JUSTICE, to change the date of effect TO 01.01.2006 to maintain the parity at least for those public sector enterprises, Banks etc. who have adequate funds/provisions otherwise this will be treated as a great injustice to the Employees who retired between 01.01.2006 to 24.05.2010 and a severe jolt to their expectations as well.I beleive the Govt.would consider this sympathetically.
convenience.
H.S.SETHI
it shame on part of goverment of the people for people that with one sroke enhance the graduity from 3.5lac to 10lac wef 24-05-2010 instead of 1-01-2010, where is the elighten press ,who are busy in giving sensation new to sell thier new instead of right cause.
ONGC employees retired up to the year 2006 are not getting any pension.This loss of 6.5 lakhs gratuity is a huge loss. Kindly do justice to us at the earliest.
Hon.President, P.M, F.M should do justice to CPSUs employees like ONGC by amending Gratuity act 1972 from 01.01.2006 instead of 01.01.2007. Earlier also these employees were getting gratuity at par with central Govt employees whenever act was amended.ONGC employees should also get gratuity of 10 lakhs from 01.01.2006. DPE should be instructed to issue guidelines to CPSUs for payment of enhanced gratuity of 10 lakhs wef 01.01.2006
will the Hon.P.M and F.M or Govt read these mails from retired employees and take corrective steps to mitigate the problem?. What is the proper forum to take up the issue?. Can any body guide in this regard!
It is most unfortunate that we the retirees of Central GOVT. CPSU’s working under the guidelines of the DPE have been targetted for all the delays by the GOvt.for which retirees have to hang them selves for not granting the effective date of enhanced gratuity payment in line with central Govt. employees.CPSU retirees are in for a rude shock. The Govt. initially approved the 2nd pay revision on 26.11.2008 by approving the enhanced gratuity of Rs.10 lakhs w.e.f. 01.01.2007. What made them change their minds? If the 6th CPC gratuity is to be implemented from 01.01.2006, then why this step motherly treatment to us? Aren’t we paying the same taxes as them? Hon. PM and FM, Kindly look into this aspect as we have become easy targets and have lost out on Rs.6.5 lakhs which we were eagerly looking forward to.The President of India Dear Madam to kindly consider the apthy and agony of theese retirees and may issue Presidential orders if necessary
It is most unfortunate that we the retirees of Central GOVT. CPSU’s working under the guidelines of the DPE have come in for a rude shock. The Govt. initially approved the 2nd pay revision on 26.11.2008 by approving the enhanced gratuity of Rs.10 lakhs w.e.f. 01.01.2007. What made them change their minds? If the 6th CPC gratuity is to be implemented from 01.01.2006, then why this step motherly treatment to us? Aren’t we paying the same taxes as them? Hon. PM and FM, please look into this aspect as we have become easy targets and have lost out on Rs.6.5 lakhs which we were eagerly looking forward to.
It is funny you are eligible for wage revision from 01/11/2007 and not eligible for increased gratuity if you retire between 01/11/07 and 23/05/10 even though the gratuity payments are worked out on the revised salary payable from 01/11/07.An employee retiring on 30/04/10 will get less amount (3.50lacs.) while the employee retiring on 30/05/10 will get 10lacs.You know bank employees retire on the last working day of the month
All the respected law makers and authorities should take a revision of the effective date,
since it deprives of equal rights to all concerned
I would request the Hon’ble President,Hon’ble Prime Minister and the Hon’ble Finance Minister to change the date of effect…it should have been effective from 01.01.2006 to maintain the parity.
Otherwise this will be treated as a
great injustice to the Employees of
PSU & BANKS those who retired between 01.01.2006 to 24.05.2010 and
a severe jolt to their expectations as well.I beleive the Govt.would consider this sympathetically as per their own
convenience.
modification
The effective date should be 01-01-2006
The parliament has taken two years to pass the gratuity bill.The effective date is 24-05-2010.When we talk of equality then why disparity. It should be effective from 01-01-2006 for all.We request our hon”ble Prime Minister and Labour Minister to reconsider and change the effective date w.e.f 01-01-2010.
There is discrimination on separation of emploment in respect of leave encashment of govt. employees and others on income-tax. This also needs to be addressed.
There is discrimination in respect of leave encashment of govt. employees and others on income-tax. This also needs to be addressed.
Sir,
It is a great injustice to the emplopyees of PSU & BANKS who retired between 1-1-2006 to 23-5-2010, as the date of implementation of Gratuity is w.e.f. 24-5-2010. The Govt. implemented 6th Pay Commission with a view to please the Govt. employees seeing the forthcoming election. It took Govt.more than two years to move the Gratuity Bill in Parliament Committee and then get the bill passed in Lok Sabha and Rajya Sabha. The bill was moved only when most of the Trade Unions met the Labour Minister, whereas it souled have been moved in the year 2008 itself after the implementation of 6th Pay Commission. It means the bill was delayed by more than two years deliberately. Most of the PSU and Banks are earning profit and they are the back bone of the country, whereas Govt. is paying salary to the employees with deficit budget every year. From this platform, WE ONCE AGAIN REQUEST THE HON’BLE PRESIDENT OF INDIA AS WELL AS TO THE HON’BLE PRIME MINISTER AND LABOUR MINISTER TO CHANGE THE DATE OF GRATUITY W.E.F. 1-1-2006 AND NOT FROM 24-5-2010 BEING THE RIGHT OF EQUIALITY AS MENTIONED IN OUR CONSTITUTION.
Dear Sir,
BALCO-BHARAT ALUMINIUM CO LTD. was a PSU which was disinvested in 2001 (51%) and now 49% is still with GOI .What rule is applicable to senior old employees who are working since PSU days.
Here the company with 51 % share is paying gratuity as per actuals without ceiling limit and old employees are paid maxm.Rs.3.5 lakhs as per PSU. Now since the gratuity amount is enhanced to Rs.10lakhs for PSU wefrom 1/1/2007.Is it not applicable in BALCO wefrom 1/1/2007. Kindly guide and clarify
What is the effective date for
the new amendment of gratuty i,e
increase from 3.5lacs to 10lacs
On Thu, 01 Jan 1970 05:30:00 +0530 wrote
>Dear sir,
It is wrong to say that judiciary can not in the matter of bill passed by parliament….it is the judiciary which is supreme and can set aside any bill which is against the law of land/constitutional remedies…..as the bill is against the fundamental right of equality since it does not give equal protection to all and the central govt employees have given different treatment than psu employees in date of effecting the gratuity amount….
It is really shameful that the builders of nation/leaders have no disqualifications where as even for the post of clerk a graduate is the minimum qualification….all MPs and MLAs should have minimum degree of law as an eligibilty in educational qualification for fighting an election…and there should be the age of retirement also for them…when question of the bill of their salary /benefits after retirement comes they passes the bill according to their whims and fancies…same is the case with judiciary also….
M.C.Agrawal
The Gratuity and second option for pension is done only keeping in view the existing employees. No care is taken for who retired recently. This is a killing effect on these retirees who will be loosing about Rs.10 lacs on Pension and gratuity just for few months.For Elected Politicians even one day is enough to get pension for 40-50 years but when it comes for their employees number of ifs and buts will come.
It is a high time to act, file a Case for both 56% PF for Pension and and Gratuity. If agrees pl. contact c.maurya@ymail.com
IS IT FAIR ON THE PART OF GOVT. WHERE WE TALK OF EQUALITY ? GRATUITY ENHANCED FOR CEN.GOVT.EMPLOYEES WEF1/1/2006 & FOR PSU WEF 1/1/2007. WHY FOR OTHERS IT IS 24/5/2010.HOPE OUR HON.PM & FM WILL LOOK INTO THIS .IT IS TO MENTION HERE THAT TAX RATE/ SLAB IS SAME FOR ALL THEN WHY THIS DISPARITY IN GRATUITY