Gratuity Act: Eligibility, New Rules, Gratuity Calculation Formula, Every Indian Must Know Everything about Gratuity Details
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| Gratuity Act - Eligibility, New Rules, Gratuity Calculation Formula |
Hello Friends Welcome to our web portal. Payment of Gratuity Act-1972 implemented on 16th September 1972. Under this act Gratuity payment provides to employee working in any Government or Private Organization Where more than 10 workers are working. A person is eligible to receive Gratuity payment If he Completed 5 years Continuous Service in Same Organization.
Gratuity Rules:-
1.Cancelation Of Gratuity Payment:-An Employer has sole right to Cancel Gratuity Payment or May pay partially even if Employee Completed all the Eligibility Conditions. This Situation may come If Employee terminated or Violated any Organization Policies during his tenure.
2. Gratuity payment Timeline For Employer:- Within 30 days of Employee Resigned or Retired from Service.
Gratuity Eligibility:-
1. Must be an Employee of Organization.
2. He must have Completed 5 years Continuous Service in Same Organization(Gratuity Period). But this Condition does not apply If Employee becomes disabled or Dies in the Service period.
3. He Either Resigned or Retired from Service.
4. Employee is Eligible for Gratuity In case of Death or he disabled due to Sickness or Accident.
In Gratuity Scheme Employee can avail Nomination Facility. After Completion of one year continuous service Employee Can Nominate Someone from his Family within one month. Other than family member for this Scheme in Invalid.
Gratuity Calculation:-
Employee Covered Under Gratuity Act 1972 based on 15 days of last drawn Salary for each Completed years. In Gratuity Calculation
Gratuity Calculation Formula- (Last Month Salary Drawn)*(15/26)*(Number Of years Service Completed).
Note- 1. 26 is Number of working days in the Month.
2. Tax free Gratuity Limit upto Rs 20 lakh and More than that is taxable as per Employee income Tax Slab.
Gratuity Payment In Case Death Of Employee:- Details of Break Up
Service Period Eligible Gratuity Payable
Less Than 1 year Two Basic Pay
More Than 1 year and Less Than 5 years Six Basic Pay
More Than 5 year and Less Than 11 years Twelve Basic Pay
More Than 11 year and Less Than 20 years Twenty Basic Pay
More Than 20 years Half Of Salary for Every Completed Six Month Period, But Maximum 33 times of Salary
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Gratuity Act