The Payment of Gratuity Act 1972:- Gratuity is a voluntary Payment made by the employer to the employee in recognition of continuous, meritorious services and sincere efforts by the employee towards the organization.It is governed under the Payment of Gratuity Act 1972.It is an Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, Oilfields, plantations, ports, railway companies, and shops or other establishments.
Applicability:-As per the Gratuity Act, the scheme for the payment of gratuity is available to:
- Employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental with.
- Every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
- Such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
Employee :-The term “employee” is defined in Section 2(e) of the Act as any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;’.
Gratuity Entitlement :-Gratuity is payable to an employee (nominee – in case of death of employee) who has rendered continuous service of five years or more on his termination of employment, superannuation, retirement or resignation. Completion of continuous service of five years is not necessary where the termination of employment is due to death or disablement due to accident or disease.
Exceptions:-Forfeiture of gratuity amount wholly or partially or to the extent of Damage /loss in case of an employee whose service has been terminated for:
- Any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer; or
- Act of riotous or disorderly conduct or any other act of violence on part of employee; or
- Any act which constitutes an offence involving moral turpitude, in the course of his employment.
Nomination:-In case of death, the gratuity is payable to any of the following persons:
- Nominee
- Heirs (in absence of nomination)
- In case nominee/ heir is a minor, such amount will 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.
The Gratuity limit has been raised from 3.5 lakhs to 10 lakhs:-There has been amendment in the Payment of Gratuity Act 1972, following proposal of Labor and Employment Ministry, demands from trade unions and others to remove the ceiling or increase the maximum payable amount, which was fixed in 1997. It shall come into force on 24 May 2010 as per the Notification in the Official Gazette.
Maximum Limit :-The Gratuity limit as per Section 4(3) has been raised from 3.5 lakhs to 10 lakhs. This will give advantage to both private and public sector employees. According to this new amendment, the maximum gratuity exemption as per IT Act also increases to Rs. 10,00,000.
Determination of Gratuity Amount
- 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 rate of wages last drawn by the employee concerned.
- The Gratuity calculation is done as per the last average remuneration drawn and time in years served by an employee.
- The amount of gratuity payable to an employee shall not exceed Rs. 10,00,000 (increased from Rs. 3,50,000).
- In order to compute the gratuity payable in case of employees employed in seasonal establishments, daily wages, or piece rated employees. Computation will be as per the provision of the Act.
- It can be formulated as follows: Basic + DA (Wages Last drawn)* 15days 126 * number of years of continuous service (six months or less to be ignored and more than six months to be counted as full year)
| TIME LIMIT / FORMS FOR APPLICATION TO BE MADE TO EMPLOYER | ||||
| Sr. | Particulars | Form | Timeline | Compliance by |
| 1. | Nomination | F | 30 days after completing 1 year service | Employee |
| 2. | Application for Gratuity | |||
|
I | 30 days from the date of gratuity becoming pay-able | Employee | |
|
J | 30 days from the date of gratuity becoming pay-able | Nominee | |
|
K | 1 year from the date of gratuity becoming pay-able | Legal Heir | |
Dear Sir,
I am working in the private limited comapny, my joining date is 01.02.2007.
In my joining letter company gives me a probation period for 6 months as per their terms & conditions.
If I may leave the job on 31.05.2013 after giving a notice period on 30.04.2013 for one month as per companies rules & regulation.
Then, my question is, how many period will be application for my gratuity payments.
i am working in a company since 1 april 2005 till now. my company has done job work on reliance industries only. now reliance has plan to plant one new plant in reliance premises.and he plan to close my company. kindly tell me if reliance has closed company then employees are eligible gratuity and leave encasement or not.
prashant kumar singh
Hi
I have been working with my company since 1st Jan 1999. When I joined I was deputed to one of the 100% owned subsidiaries and I stayed there for around 9.5 years. I came back to my parent company in June 2008 and since then I have been in India. Now I have resigned and I need to know for the purposes of gratutity payment whether the period for which I was out of India will also apply or only the period in India. I will be 3 months short of the 5 year period since the time I joined back in India in June 2008. Can I still clam gratuity. Please advise.
thanks
i doing job continuously 5.7 year but i take medical leave 3 month
can i eligible for graduate
please suggest me
I resign from a airline travel agency (partnership firm) after working a 5 and half year, giving 1 month prior notice, can I eligible for gratuity ?
Awaiting for reply,
Thanks
Mahesh
Sir
my friend father was working in pvt.company for four year 3 months. last three months back employee was expiried in accident. is eligible for the gratuity.
Would like to know the initial period for eligibility to Gratuity. Whether an employee should be completed 5 years of service or a service of 4 yrs 6 months and above would be considered for payment of Gratuity?
Hi,
I would like to know whether notice period 1 month also can be considered for the gratuity payable period(5 years). If I resign at 4 years and 11 months and serving 1 month notice period, will I eligible for gratuity.
Thank you,
Prasad.
i am working in a private company doj : 24/01/2013 and DoL : 2/2/2013 and i took ESI Leave for fifty days during this five yeas, am i eligible for gratutiy ?
Hello Sir
i am Bidesh here and want to know that i worked for pvt company for 6 yrs not continuously due to illness and left it and got demand for gratuity but employer said no so can we claim against employer ? as per law or if yes then what is the process of it
kindly explain and let me know.
Hi, would like to know if gratuity is applicable to an employee whose rolls has been shifted from one manpower agency to another manpower agency but deputed to the same company Continually for more than 4 years and 6 months.
If applicable who is responsible to pay the gratuity to the employee
dear sir,
DOJ: 01-07-2008
DOL: 07.12.2012 (at the behest of employer)
5 days a week
3 months salary will be paid as per the notice period shown in the appointment letter.
Am i elgible for Gratuity?
Hello Sir
i am Bipin here and want to know that i worked for pvt company for 5.5 yrs not continuously due to illness and left it and got demand for gratuity but employer said no so can we claim against employer ? as per law or if yes then what is the process of it
kindly explain and let me know that which books is better for ready reference
maine hospital me 20 year service kiya 1st time epf serender after 8 year next 8 year epf cut my salary 3rd time 4year epf cut my salary and service is reguler my owner is refused pay my gratuity
i want to know how to get gratuity after 6 years of job during resignation.
dear sir,
please tell me that in our company one worker is death
his date of joining is 01/10/1991
and date of deth is 20/07/12
total service year are 21 years
plesea tell me that we have to pay gartuity for 21 year’s or 25 year’s
09225965390
Dear Sir,
I have joining my private company as a temporary worker from 1 July 1996 to 2 June 2010 Total Period 13 Year 11 Month
I have Comfirmed ( Parmanent Employee ) in this same company from 3 July 2010 still i am working there
My age is -37 Year(15/01/1975)
So my Question is i am elegible to the gratuty for the temporary period
Regards
Shekhar Paner
Nashik Maharashtra
(M)9822322815
Email:- scpaner@rediffmail.com
Kindly Send the Replay
Thanks.
The part time accountant is eligible for the Gratuity. Kindly send the reply.
Dear sir
I joined Oil & Natural Gas Commission on 12.04.1961 and resigned on 01.10.1982 after serving for more than 21 years of unblemished and blotless services exploring the petoleum & Natual Gas thoighout the country.
I was paid a least sum of Gratuity for Rs. 5,980/= only, the payment for the period till my total emoluments wee not exceeded s. 1000/= only, i.e. may not be more than five years of my service, whereas at the time of my resignation my total monthly emoluments were around Rs. 4,000/=.
Please do let me know that whether the Payment of Gratuity Act, 1972 for the payment of Gratuity for the complete period of my service with ONGC was not having my eligibility to receive the full amount of garatuity for my more than 21 years of unblemished service with ONGC, for which during these hard times of my life I may request fo the Balance Payment with up to date interest.
Appreciate your immediate comments and to know as to how to proceed further to receive my DUE.
INDRA PRAKASH KATYAL
D-1/ 65, Janakpuri
New Delhi – 110058
(M) 9899605564
Hi, i worked 4yr 260days in public limted company, i am elibible for gratuity or not so please help me
Hi, we hv nine year experience pls confirm can we claim gratuity, bcoz our company are paying only upper level employees, and we are in executive rank.
Pls provide the claim agencies which can be fight with them.
Regards / Rajendra
I have been employed with a MNC for the past 6 year,and we are just 3 employees .Am I entitiled for Gratuity
Dear All,
In my appointment letter Gratuity is not mentioned. This is Private Limited company. I am working for 5 years 9 months and 19 Days. Am I eligible to get Gratuity amount. Or Do I need to apply somewhere?
Please help me.
Thanks to you all for this helpful discussion.
Can the trust receive transfer from other group company trust?
Can an organization have two group gratuity schemes separately for two different class of employees
Dear sir,
My CTC is arround Rs.18,000 with BA as 9800, HRA 7400 & CONVENE 800.
SERVICE FOR 13 YRS.
CAN YOU PLS LET ME HAVE FORMULA & FINAL GRATUITY WHICH CAN BE EXPECTED.
THANKING YOU.
I, am Basudev Biswas ia working more than six years in private company. Can i eligibility to get gratuity benefits
Dear Sir(s),
I would like to know what is the tenure for applicability of Gratuity. i.e. One Employee working in a private Sectory Company either Private Limited or Public Sector company for 25 years or on retirement age and then he leaves the company either by resignation or temination or retirement- in this case – seeking clarification – as to whether gratuity payment is paid to this employee for the whole years employed in the organisation or that he shall be entitled to receive only 20 years of Gratuity from the time of joining till completion of 20 years services in the same company and that remaining period of service years not taken into consideration – which please clarify.
Thanking you and looking forward to your reply on swaami@mhe.elecon.com
Hi,
After completion of 4 year and six months my company has liquidated,
should I eligible for Gratuity.
Is Completion of continuous service of five years is not necessary where the termination of employment is due to the liquadiations of company.My company was Joint venture of SAIL(Steel Authiority of India Limited) and UEC.
Regards Sanjeev nanda
Dear sir,
My CTC is arround Rs.19,000 But my basic found only Rs.4932 & all other amount are added in other allowance.For my gratuity calculation they are taken only basic ( No DA allowance given )So my gratuity is coming very low.
pl advice
Dear Sir
I am Pankaj Bansal from Hisar(Haryana) please clariffy me that there is any provision or not that the service tax will be charged or not on the Labour Services provided in education Institutes. if there is any provision then what is the percentage
Please clarify whether Gratuity is a voluntary Payment made by the employer to the employee OR a statutory/ mandatory payment made by the employer to the employee ….
I am a teacher in private school since 12 years. Now i joined another school. Am i entitled for gratuity.
yaa you are eligible for gratuity
Dear Sir,
i am last 10 years working in propriety firm , of computer resales office , i am laibale to gratuity , please send me reply thanks
Sir,
Is there any amendment in No. of days 15 to 25 in calculation of gratuity, under Gratuity act 1972.
Now it is calculated as Basic+DA*15* no. days (service)/26.
I am working in unaided educational institution from Feb 1988 as a office superintendent our institution covered under employees Provident Fund Act 1952 & affiliated with CBSE New Delhi. But Gratuity Act not available what is latest law for the institution.
It appears that GOVT HAS ISSUED GAZETTE NOTIFICATION ON 31.12.2009, BY AMENDNG THE TERM “EMPLOYEE”, THUS MAKING ‘TEACHERS/PROFESSORS” ELEIGIBLE FOR GRATUITY Wef; 03.04.1997. This amendment is mainly to include Teachers.But where the term’ Teachers’ is added in gratuity act, since some of the private school managements are after retired teachers to show the term ‘teachers’ in the act. any body can help please……
ANY EMPLOYEE COMPLETED TENURE OF SERVICE 4 YEARS, 11 MONTHS & HAS RESIGNED. IS HE ELIGIBLE FOR GRATUITY????
Dear Sir
I have worked in the organisation from dated 15/11/2001 to 5/08/2011 , will i be elegible for the gratuity .
I have submitted the resign dated 21/07/2011 for releaving dated 5/08/2011
Regards
Rahulpreet Singh
ANY EMPLOYEE COMPLETED TENUARE OF SERVICE 4 YEARS, 6 MONTHS 11 DAYS..& RETIRED…HAS HE ELIGIBLE FOR GRATUITY????
Is it correct that the amendment made in gratuity act for teachers, the calculation of gratuity for teachers has to be done treating their date of joining as april 1997 even if the teacher was serving say from from 1980? If this teacher retires in 2000 , is the teacher not entitled for gratuity as the teacher has not completed 5 years of service from 1997? Kindly clarify the amendment made in the act.
Hi,
I have joined my commpany on 22nd May 2006 as a trainne(not on company’s payroll) and got confirmed on 1st January 2007 (on company’s pay roll). Every year from then on Gratutity forms a part of my CTC. Hence, I would like to check if I am eligible to get the gratuity amount if I resign on 1st April 2011. The notice period in my company is 3 months and hence If I resign on 1st April 2011, I would be relevied from my services on 31st June 2011. Please advice so that I can take my decision accordingly.
The term “teacher” is added in the gratuity amendment bill 2009. I have a copy of the same but do not know how to attache it. Whoever needs it, please send me a mail on id: krishnappa.salian@yahoo.in
It appears that GOVT HAS ISSUED GAZETTE NOTIFICATION ON 31.12.2009, BY AMENDNG THE TERM “EMPLOYEE”, THUS MAKING ‘TEACHERS/PROFESSORS” ELEIGIBLE FOR GRATUITY Wef; 03.04.1997. This amendment is mainly to include Teachers.But where the term’ Teachers’ is added in gratuity act, since some of the private school managements are after retired teachers to show the term ‘teachers’ in the act. any body can help please……
Read more: https://www.taxguru.in/income-tax/all-about-payment-of-payment-of-gratuity-act-1972-in-brief-including-the-recent-amendments.html/comment-page-1#comment-84856#ixzz0uu4lBNeU
It appears that GOVT HAS ISSUED GAZETTE NOTIFICATION ON 31.12.2009, BY AMENDNG THE TERM “EMPLOYEE”, THUS MAKING ‘TEACHERS/PROFESSORS” ELEIGIBLE FOR GRATUITY Wef; 03.04.1997. This amendment is mainly to include Teachers.But where the term’ Teachers’ is added in gratuity act, since somof the private school managements are after retired to teachers to show the term ‘teachers’ in the act. any body can help please……
The part time accountant is eligible for the Gratuity. if yes
Kindly send the reply.
Thanks
Would like to know the initial period for eligibility to Gratuity. Whether an employee should be completed 5 years of service or a service of 4 yrs 6 months and above would be considered for payment of Gratuity?
There are may apppeals to the PM, President & Chief Justice of India made by the employees retired from private sector/PSU/Banks/LIC between 1.1.2006 to 23.5.2010 to issue fresh administrative orders to make the effective date as 1.1.2006 i.e. in line with government employees. Trust and hope that the injustice meted to senior citizens is rectified by the result of which these people shall get some reprive when the food inflation is in douible digits.
The Farmula should be as follows: Basic + DA (Wages Last drawn)* 15days/26days * number of years of continuous service (six months or less to be ignored and more than six months to be counted as full year)
I have joined at one organisation on contract basis in 1998 and continued for 8 years without break and regularized in 2006 and given resignation in 2021 . whether the gratuity is calculated from 1998 ?