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 | |
I m an Accountant of an Bihar Govt. Organisation on Contract Basis since 2010 Can i will be eligible for Gratuity payment after continious Contractual Service of 05 Years and above . Please Suggest.
My brother working under contractor since 4 years.Suddenly died in the factory. Whether wife is eligible for claiming gratuity. Give me the clarification please.
i am working a comp as a casual date 31-05-1987 then 01-06-1990 contract basis. i want know my service is counted year 1987 or 1990.
I am working in a Psu bank since 26.10.2009 now planning to be get relieved on 26.9.2014 after putting 4 years & 11 month service.Shall I eligible to get gratuity as per guidelines.
HI. I worked in the corporate office of a retail firm for 4 years and 11 months. My company says i am not eligible for gratuity. Can u you pls help shed light on the same and is there a court order of the same that i can use to show the company
My father works in cooperative bank in chandigarh..he is to get retirement on 31 aug,2014…but according to new rule govt employees are to retire at age of 60.Is my father eligible to get the benefit of increased retirement age. Can we get a stay on the same and my father can enjoy 2 years more of his service at the bank….pls help…
Dear sir I worked in a charitable religious organization for two years and my project got over and after two year again I got a job in same organization and worked for three years and now I want to resigned from the job and look for the gratuity. Is it possible to get the gratuity from the charitable organization. Please let me know?
I am working in IT company from last more then 5 years can i get gratuity
for IT and KPO company is applicable for gratuity
Dear Sir,
i was dismissed on service on 1993 during pendency of the case in high court. i superannuated on 30-06-2006 and i was reinstated in service with all consequential service benefits by the Punjab And Haryana high court on date 13-08-2013. Please let me know as to what maximum amount of Gratuity i should get. Can i get gratuity which invite interest. As my dismissal from service has been set aside by The High Court. Please respond.
thank you.
Jaswant Singh. Contact No. 09354409794
Hi Syamal Rao says
yes your friend father is eligible for gratuity. He has completed more than 5 years of service in his new employment. He should get gratuity as pee the below mentioned formula.
Basic salary X No.of served period X 15/12
I hope your your doubt is clear.
Thanks and regards,
Abhishek
sir,
my father is an employee of private company (which engaged in gas supply for commercial uses).now my papa give resignation from employment. he worked in that company since last 22 years. And in this co. no. of employees are more than 10.
problem is there i don’t know, this factory which i mentioned above .is applicable gratuity act to this company or not???????
please sir help me. .
sir,
my father is an employee of private company (which engaged in gas supply for commercial uses).now my papa give resignation from employment. he worked in that company since last 22 years. And in this co. no. of employees are more than 10.
problem is there i don’t know, this factory which i mentioned above .is applicable gratuity act to this company or not???????
please sir help me.
Respected Sir,
My friends father had joined in a company after his retirement and worked for 8 Years and resigned. My question is, that is he eligible for gratuity or not.
Please clarify my doubt.
Thanks and regards,
Syamal Rao
Sir,
My freind was working with bank and worked for 21 years and in accident he died, her wife get graduity of Rs.580000 and leave encshment Rs.197000. is this both amount taxble?
Please let me know whether gratuity is payable on the arrears of salary when the gratuity is paid on cessation of employmsent
I am a teacher joining dt 31may 2010,will be resigning in october will i be eligible for gratuity and is the probation period considered.
Hi Sir,
My Brother worked in PGI chandigarh as a regular central govt employee and he left the job after continuous service of 9 years and settled abroad.
Please tell me, if he is eligible for gratuity under central govt gratuity scheme or not.
His resignation has been accepted by the hospital staff.
Warm Regards,
Hi,
Can you please let me know if I am eligible for gratuity. my date of joing was 31-August-2009 and last date was 21-June-2014.
I have taken transfer from branch of company to another. Both the branch maintain different trust for gratuity. can i transfer my gratuity from one trust to another trust within same company? I have already worked in earlier branch for atleast 1 and half year.
Dear Sir,
I have a query about the minimum service period required for claiming gratuity. Is it 4 years and 9 months or 5 years? and does there is any related document regarding this? please do answer to my query. –
Dear SIR,
MY name is MISS S.MARY IMMACULATE.Iam from COONOOR,Nilgiris DISTRICT.For 19 years and six months i worked in a private polytechnic at METTUPALAYAM,as a LECTURER.I worked from 01.08.1994 to 07.02.2014.My last drawn salary was Rs.35,333 (Basic 22947+DA 12386) and my deduction of pf was RS.4240.UNfortunately I was forced to resign from my job,due to the college principal’s torture by all means.On 30.5.2014 I Consulted a labour officer and as per his advice I APPLIED FOR MY GRATUITY.But the Management is not willing to give my gratuity.They are saying that it has been included in the PF.Sir,what should i do now?please help me out.
REDARDS,
MISS.S.MARY IMMACULATE
Dear Sir
I retired from a goverment job and joined a private company after retirement.
I worked for about 9 years on leaving the association i was being told that no gratuity is paid to retired person is is true or can i claim for it.
Thanks and regards
Dr. s.c. Gauba
I served i a private Industry for 09 years, latest as a manager Qa. The company has not payed me the gratuity by saying that Manager is not entitle for gratuity. Please guide me what I can do for it.
Regards
Dear Sir, I was retire on 28/2/2014 from local co-op bank. My last month salary 61048 (basic+DA).my question is how gratuity count.last month working days 28days.As per our workers Union settlement I eligible for 220 month salary as gratuity. Please guide me earlier as posible.
Can gratuity be claimed more than once in the same company. Worked for 9 years. was given gratuity ealier by the co. as the co was changing its name , however management is the same . Thus now when leaving can I claim gratuity for the balance period. As if co had not given me earlier for the 5 years completed , now when I am leaving I would get for 9 years.
Please provide revision in the maximum entitlement of Gratuity since 01-01-1990. My father got retired from services in the year 1996. What was the maximum eligibility during year 2006 ?? Pls clarify
One of my friend retired recently after attaining superannuation 60 years. He worked for 27 years 11 months and gratuity paid for 28 years. while making payment tax was deducted from his gratuity.
Gratuity paid 515307.69
Exemption 494670.40
Tax deducted 20637.29
can you please explain?
One my colleague has worked as clerk in a organization,Then he has selected as officer in the same organization .He resigned from the clerk and joined as officer on next day.Whether his services worked as clerk will be included for calculation of length of service in the organization.
Dear Sir/Madam,
I am working in organization from Nov 2008 to till date. From date of joining I am on pay roll of company ( 6 months training + 6 months probation and after probation period I got confirmation latter ) as per that I have completed 4 year 10 months in same organization.
Kindly let me know whether gratuity qualifying year is calculated including training / probation period or excluding either of or none. Please provide me text of act to support your views.
Dear Sir,
I have a query about the minimum service period required for claiming gratuity. Is it 4 years and 8 months or 5 years? and does there is any related document regarding this? please do answer to my query.
I have complated 7 years of my continuous job i had given regination letter to company but not complete two months nitice period i am eligible for gratuity
I have a query, whether an employee who has cheated while purchasing a raw material for factory use, and he has also completed more than 5 years. should he be given gratuity on this unethical behaviour?
Please advise.
Dear sir,
I AM JOINING PVT LTD COMPANY ON 6/10/2008
I AM RESIGNING COMPANY ON 7/06/2013 ( 1 MONTH NOTICED PERIOD)
COMPANY RELIVE ME ON 8/07 /2013.
COMPANY HAVE 6 DAY WORKING DAY WEEK.
Since I am not completing 5 years, my company is not willing to pay gratuity amount due to me. As I have gone through different websites, I found a person who has worked 4 years 240 days becomes eligible for gratuity payment, though I didn’t find any supporting clause or section. If this is true then I believe I am eligible for gratuity payment.
REGARDS
SANDEEP WADEKAR
RAJGURUNAGAR PUNE. 410505
(M) 09226486450
EMAIL – sandeepwadekar2010@gmail.com
Respected Sir
I am working as an Accountant in CBSE affiliated School in Haryana.
My date of joining organisation : 11.04.2007
My Last working day in organisation : 22.01.2012
Since I am not completing 5 years, my company is not willing to pay gratuity amount due to me. As I have gone through different websites, I found a person who has worked 4 years 240 days becomes eligible for gratuity payment, though I didn’t find any supporting clause or section. If this is true then I believe I am eligible for gratuity payment.
Can I request your expertise here as I have no knowledge on subject? Am I eligible or not? If yes, can you provide some supporting doc which I can forward to my company so as they pay my gratuity amount. And what’s the provision for earned leave encashment in CBSE School for admin staff.
Many thanks in advance.
Regards,
Raj Kumar
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……
as an this date i worked for 4years and 6months can i get Gratuity?
I have joined my organisation on 7th July 2008 as GET and probation period after my joining was 1 year. I am going to complete my 5 years on 8th July 2013 and i want to take relieving from the company but HR is saying that training period is not counted for the payment of gratuity.
Please suggest how I should claim my amount?
GOOD ARTICLES
very good articles. but gratuity is paid for @rate of 1 month salary on completion of every year of service over 15 years of service . actually is depending on no of completed years of service.
I am working in an office of CA for 20 years but the CA is no more now can i claim gratuity.
I want to know whether a part time employee is eligible to get gratuity from his employer when the service period is exceeding more than 15 years ?? Awaiting your reply.
why we are taking 15 days wages for calculation.
why we are taking 15 days wages for gratuity calculation
An employee in organisation retired on Jan.2013 and his gratuity claim was settled on the basis of last wages drawn by him at the time of his retirement.but subsequently,(in march 2013) management has declared revision in pay scales of employees and the retired persons were given arrears of pay. The question is whether such retired employees can claim gratuity amount on the increased salary? Can we refuse them arrears of gratuity claim ,once their claim is settled?
Whether the employees in training(Trainee) period is eligible to gratuity or not
suppose the employee is working 2 years trainee and 4 years probationary/confirmation.The above employee is eligible for gratuity or not
Dear Sir/Madan,
I am working in organization from 26th 2008 to till date. From date of joining I am on pay roll of company ( 1 Year training + 1year probation and after probation period I got confirmation latter ) as per that I have completed 4 year 6 months in same organization but my gratuity qualifying year showing only 3 year. Regarding that I have talk with HR , they said Training period is not considered while calculating gratuity qualifying year but this is not mentioned in gratuity Act.
Kindly let me know that gratuity qualifying year is calculated including training period or excluding training period
Regards,
Dear Sir/Madan,
I am working in organization from 26th 2008 to till date. From date of joining I am on pay roll of company ( 1 Year training + 1 year probation and after probation period I got confirmation latter ) as per that I have completed 4 year 6 months in same organization but my gratuity qualifying year showing only 3 years. Regarding that I have talk with HR , they said Training period is not considered while calculating gratuity qualifying year but this is not mentioned in gratuity Act.
Kindly let me know whether gratuity qualifying year is calculated including training period or excluding training period
Regards,
I employment was terminated on 27th Dec 2012. I have completed the years required which enable me to get my gratuity. On repeated requests to my employer, my gratuity has not been paid yet. What rights do I have in this case?
Dear Sir,
I am working in the private limited company, 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 applicable for my gratuity payments.
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 applicable for my gratuity payments.