Gratuity Act - Eligibility, New Rules, Gratuity Calculation Formula

Gratuity Act: Eligibility, New Rules,  Gratuity Calculation Formula, Every Indian Must Know Everything about Gratuity Details

Gratuity Act, Eligibility, Calculation
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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