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 | |
Sir,
I want to know Whether Part Time employees is entitle for Gratuity or not. explanation is required in this respect.
Sir,
On 7.7.2015 I submitted a query on payment of Gratuity, along with my e-mail ID. Till today, there is no feed back received. I shall thank you for a valid reply and advise without delay.
worked with an organization from 10th oct 2010 & resigned on 09 th july 2015. I have completed 4 years, 8 months & 8days. . shall i be eligible for gratuity?
run by trust.
Hello,
I would like to know about the acceptance and enactment of “THE PAYMENT OF GRATUITY (AMENDMENT) BILL, 2012”.
Clause 2 of the Bill seeks to revise the rate of gratuity from fifteen days’ salary per completed year of service to thirty days’ salary for every completed year of service, to all the employees employed on wages in any establishment, whether it is public or private.
Please help if this is now a ACT or one need to consider thee old one where it provides gratuity only for 15 days for every year completed
Regards
Sir,
I am a part time employee under a private firm who is working from 01.04.2005 to 31.03.2015. I am taking bonus from 01.04.2005 to continue. Now the Employer as closing the firm. I want to know, Is there any right for me to take gratuity from that firm ?
I worked in a Ltd. firm in Pune between 23.11.1976 and 29.5.1982 on a regular basis. The Company, on my leaving serice, did not pay any gratuity on reason “My service with the company was for a less period of five years on a less salary of Rs.1000/- per month”. Is that reason correct ? If not, how to get the due amount and interest? Can the Company be asked to pay for extra amount for non payment all these years ?
Sir,
I was working as a teacher in a private school having more than 10 employees since 1993 and retired in May 2015. Whether I will be eligible for gratuity from the year 1993 or from the year 1997 as per PF act of 19.04.1997, as the management says that I am eligible for PF from 1997 onward.
Regards,
V.Padmanabhan
Dear Sir,
How many person available in company for gratuity benefit.
Regards,
Mehul
I have an employee who was working on contract, renewed yearly since 2005 on a consolidated salary. She was a Conf. Secretary. She was confirmed in the management cadre ( permanent employee) in 2011. She resigned in May 2015 and hence has not completed 5 yrs. of service as a confirmed employee. But she was a member of PF since 2009.
Is she eligible for gratuity ? An early reply will be appreciated.
After completion of 15 years of service in a company, they shifted me in their group company. In the other group company I have completed 5 years of service. Will 20 years considered for payment of gratuity or not?. Whether gratuity will have to pay by both companies or second company. Pls suggest.
I worked with an organization from 26th june 2010 & resigned on 15th may 2015. I have completed 4 years, 10 months & 18days. I had 38 days of leave balance while resigning. shall i be eligible for gratuity? please suggest
Hi,
can you please tell me whether any NGO or any trust eligible to pay gratuity.
Hi. I am dr ajit shrivastava from gujarat.i had worked as associate prof in c.u.shah medical college from 2006 till 2012.but even after 2nhalf years i have not got gratuity from the trust…what to do?
Hi,
A very rare of a case I need to get clarity on to….
If an employee has joined the organization after the age of 60 years but worked for the company for more that 5 years after that (his current age being 66 years) is he liable for Gratuity?
would be glad to get an answer…
Thanks
Maya
address of controlling authority the payment of gratuity act 1972 at bhopal (M.P.)?
Hi, in case of private sector employees, gratuity is made part of CTC, is that legal.
Also, supposedly my monthly basic is 20000 Rs, and without any increment, after 5 years, if I resign, I would have contributed 20K * 5 = 100000 Rs as gratuity from my CTC but what I will be entitled to get would be 20000 * 15/26 * 5 = 57000, so it is a shear loss. Please explain how does gratuity work for private sector if it is made part of CTC?
My wife’s colleague absorbed in MTNL wef 1.11.1998 and retired on 30th April,2015. She has not taken any extra leave. She completed her service as per rules. MTNL is giving Gratuity(Basic plus DA multiplied by 17 years divided by 26) instead 17-1/2 years. Can you please clarify whether she will get 17 years or 17-1/2 years or 18 years? Thanks
My Self Working Is a cLERK In Market Committee Budhlada Distt. Mansa. State Punjab. Date Of Joining 01-01-1978, Date Of Retd. 30-09-2012, Total Service 34 Years 9 Months Wheather The Member Of Market Committee Are Eligible For Gratuity Under Act 1972. As It Is Appliocable Nagar Council Budhlada. Distt. Mansa.
Sir,
I had worked 4.2 years in a company, but transferred me in the same group, but same director, can i legally get a gratuity, if they are refused to pay what is the steps to get it legally
Hi,
I have worked in a private EPC MNC in Chennai in a IT Management position for last 4 years before being asked to leave two months back (Feb 2015) due to poor Company financial performance and workforce restructuring.
I understand from earlier posts and responses that my gratuity entitlement comes only after 5 years of continuous service, however whats the rule if company asks employees to leave due to poor company performance and restructuring. There is no retrenchment money given in this to the employees other than normal notice period payout of one month.
My gratuity component was part of negotiated Salary CTC and hence it is a financial loss from committed compensation, if not paid.
thanks
atanu
Sir,
I had worked 12 years in a company, but transferred me in the same group, but same director, can i legally get a gratuity, if they are refused to pay what is the steps to get it legally.
I have completed 4 years 7 months and 28 days in private sector. Shall I applicable for gratuity ?
Dear sir I have retired in jan 31 2014 How much gratuity I will get? As per new PRC will I get 12 Lakshmi?
I have been working in a private export company for last 16 years. I think I am not satisfied with salary and If I resign from the company. Then should I eligible for any allownence (how much). I am getting 14K per month and one extra salary on divali as bonus. There are 3 employes( including me) and one part time accountant. It is not ltd/pvt. ltd. We are getting our salaries in cash.
Pls. guide.
My mother was working tamil nadu gov since1993 now she was deathfoo 2014 me and my brother Nomnie my brother get married after was death he has 2years child the gratuity share pay me and my brother nominee or pay only me pls give sussion
My mother was working tamil nadu gov since1993 now she was death 2014 me and my brother Nomnie my brother get married after was death he has 2years child the gratuity share pay me and my brother nominee or pay only me pls give sussion
Whether the employer can make the payment of gratuity in two instalment.
Respected sir
I have joined a rajasthan vidyut utpadan nigam on 25.03.2004 on contract (fixed pay) basis as Jen but 22.11.2006 nigam has terminated me from my services and on 23.11.2006 nigam has appointed me as regular Jen for a period of two years , on two years successful completion , i was regularised .
on dated 13.12.2011 i have resigned from nigam services and joined a PSU.
sir please let me know whether i am eligible for Gratuity . if yes for how many years?
I’m employed in private organisation for 27 years (part time ,)I’m also govt full time employ. I’m entitled for gratuity from private organisation or not
My wife was working in a Pvt. Hospital in Delhi for last 8 years and now she has resigned. And her salary was spilted into Basic + other Allowance.
The accounts department has Calculated her gratuity only on Basic. Is this correct. Please help me on this.
I am working for a company from march 2010, in between 6 months i am forced to go for medical leave due to an accident, Am i eligible for gratuity now? in that 6 months 2 months are adjusted with the available leaves, and 4 months were Loss of Pay, but no break in service, just considered as medical leave / absence, Please let me know
I have joined a company on 12th July 2010 and my last working day would be 20th Apr 2015. i will be completing 4years 9months & 8days. please let me know if i am eligible for Gratuity payment or not.
Thanks,
I have joined Rolta on 17th Jan 2011 and now I am getting superannuated on 28th Feb 2015. Will I be eligible for gratuity in present company.
with regards
Gupta R K 7738777076
I have worked for a company for in India for 7 years and got transferred to US office, but my payroll has been stopped in India and a new payroll has started in US, will my Gratuity period continues?
WHAT IS MEANING OF DA AND ADOC.
BOTH ARE INCLUDE IN SALARY FOR CALCUTION OF GRATUITY.
I WAS WORKING IN BEDMUTHA INDUSTRIES LTD., NASIK MAHARASHTRA 6&1/2 YEARS BUT I HAVE NOT RECD PF AND GRATUITY AMOUNT AFTER COMPLETION OF ALL OFFICIAL PROCESS WHAT I CAN TAKE ACTION TO GET IMMEDIATELY. COMPANY NOT CO-OPERATED.
Dear Team,
I am working for a proprietorship firm from last 17+ years.Now company is going to close their operations .Can i be entitled for Gratuity.As till date we haven’t had any deduction for PF & also any other.How can i claim my gratuity from the company.Is it compulsory for any company to pay gratuity for the employer if they had completed 5+ yrs.pls guide……………
Hi,
I completed my 4 years and 300 days in my current company do I eligible for gratuity?
Joining date was 12-Apr-2010 and last day of working is 23-Jan-2015.
Rgds,
chandra
I have joined one private org. at the age of 56 years and worked for the next13 years.
Shall i will be eligible to get the gratuity payment?
I have completed 4.9years and 7 days. Am I eligible for Gratuity? – See more at: https://taxguru.in/income-tax/all-about-payment-of-payment-of-gratuity-act-1972-in-brief-including-the-recent-amendments.html#sthash.k3vybge4.dpuf
my father was working in Zila sahakari bank limited basti,U.P. He retired on 31-08-2014.His gratuity was credited by LIC on 20-10-2014 to Zila Sahakari Bank but Bank is not paying his amount of Gratuity by way of cash, cheque or draft.what should we do now? plz help and plz also tell; is “payment of gratuity Act 1972” applicable on employees of co-operative bank?
My father was working in a co-operative bank(Basti U.P.) Now he’s retired. plz tell me Gratuity Act is applicable on CO-OPERATIVE BANK or not. its very important.plz help me. plz tell me as soon as possible through email.
Whether an LIC Agent after completing 15 years of agency becomes a permana\ent employee of corporation and retires after that. He gets his gratuity as an officer. Is he eligible for getting the gratuity of his agency period also ? It means can one person gets two gratuity from the same organisaion?
I have completed 4.7years and 12 days. Am I eligible for Gratuity?
Hi,
I have worked for a company for in India for 4 years and 4 months and got transferred to US office, but my payroll has been stopped in India and a new payroll has started in US, will my Gratuity period continues?
Can a company pay Gratuity for 4 years and 4 months, I know I am not eligible for Gratuity but if Company wish to keep me happy so that I may go back and join later once I am back to India can company pay Gratuity for those 4 years and 4 months that I worked?
Thanks,
Prakasha
Sir
we have received a notice from dy.
Labour commissioner. Under. Gratuity act 1972
nomination
gratuity
notices
etc
kindly send mail how to compliance above
Dear Team,
I am working for a proprietorship firm from last 13+ years.I had now resigned from my job.Can i be entitled for Gratuity.As till date we haven’t had any deduction for PF & also any other.How can i claim my gratuity from the company.Is it compulsory for any company to pay gratuity for the employer if they had completed 5+ yrs.pls guide……………
Dear sir
I have resigned from private consulting company.
D.o.j. 20/07/2007.
Resign date. 18/09/2014.
Can I eligible for gratuity. If yes then how much amount?
Dear sir
I am working with a hotel and joined here in 22 nd June 2010 . We have 6 days a week office . This is my 5 th year of work and I would like to understand when I will be eligible for gratutity .
Also for calculations is offs like Sundays and leaves taken into consideration
Whether the teachers of a private and non-aided school in West Bengal working for five years leaving the school on resignation and/or retirement are entitled to gratuity as per Gratuity Act.