Hi,
I joined my current employer on Jan 2 2006, I resigned on Nov 4th with 2 months notice period. My last date at office should be Jan 03 2010 but my employer has made Dec 31st as my last day at work.
1) If i get relieved on Dec 31st, would i be eligible for gratuity since Jan 1st is a holiday for my employer. Jan 1st is the day on which i complete 5 years of service.
2) Since i am getting releved a day earlier at my employers discretion, would i still be eleigible for gratuity.
From United States, Dallas
1I joined my current employer on Jan 2 2006, I resigned on Nov 4th with 2 months notice period. My last date at office should be Jan 03 2010 but my employer has made Dec 31st as my last day at work.
1) If i get relieved on Dec 31st, would i be eligible for gratuity since Jan 1st is a holiday for my employer. Jan 1st is the day on which i complete 5 years of service.
2) Since i am getting releved a day earlier at my employers discretion, would i still be eleigible for gratuity.
From United States, Dallas
Hi Firoz,
According to new amendment, the maximum gratuity exemption as per IT Act increases to Rs. 10,00,000.
Determination & Calculation 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.
* In order to compute the gratuity payable in case of employees It can be formulated as follows: Basic + DA (Wages Last drawn)* 15days 26 * number of years of continuous service (six months or less to be ignored and more than six months to be counted as full year)
In your case, you can avail the benefit of gratutiy.
Regards
Siji K Joy
Pune
From India, Mumbai
According to new amendment, the maximum gratuity exemption as per IT Act increases to Rs. 10,00,000.
Determination & Calculation 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.
* In order to compute the gratuity payable in case of employees It can be formulated as follows: Basic + DA (Wages Last drawn)* 15days 26 * number of years of continuous service (six months or less to be ignored and more than six months to be counted as full year)
In your case, you can avail the benefit of gratutiy.
Regards
Siji K Joy
Pune
From India, Mumbai
Dear Siji,
Perhaps you have given wrong reason to calculate the Gratuity?
Firstly you must have worked for five continoues year of service.There after you are eligible for sixth year benifit if you have worked for more than six months.
But in this case of Firoz he is entitled for Gratuity because even there is any ambiguity in the days of his fifth year of working, he must have completed 240 days in his 5th year.It is a decided case that if an employee has completed 240 days in the 5th year he is entitled for Gratuity.
Thanks
L M Sharma
9216119537
From India, Vijayawada
Perhaps you have given wrong reason to calculate the Gratuity?
Firstly you must have worked for five continoues year of service.There after you are eligible for sixth year benifit if you have worked for more than six months.
But in this case of Firoz he is entitled for Gratuity because even there is any ambiguity in the days of his fifth year of working, he must have completed 240 days in his 5th year.It is a decided case that if an employee has completed 240 days in the 5th year he is entitled for Gratuity.
Thanks
L M Sharma
9216119537
From India, Vijayawada
Hi Mr. Siji,
I am not agree with your opinion as the mentioned criteria is for the calculation only, not for eligibility.
For eligibility purpose you must complete your 05 years of service.
As per as the above mentioned condition, You must be on role on your completition day.
Regards,
Dinesh Adikane
Deoli, Wardha.
From India, Wardha
I am not agree with your opinion as the mentioned criteria is for the calculation only, not for eligibility.
For eligibility purpose you must complete your 05 years of service.
As per as the above mentioned condition, You must be on role on your completition day.
Regards,
Dinesh Adikane
Deoli, Wardha.
From India, Wardha
hai
My understanding abt the gratuity is 05 years completion of continuos service. As there is a decision by the Chennai highcourt that the same is also eligible for the employee even it is 4.8 years( calculated as 240 days if worked in a year is eligible & treated as completion of one year) .
In view of the decision i think he is eligible for Gratuity even if the organisation disputed.
Regards
Nimesh Paul
From India, Kochi
My understanding abt the gratuity is 05 years completion of continuos service. As there is a decision by the Chennai highcourt that the same is also eligible for the employee even it is 4.8 years( calculated as 240 days if worked in a year is eligible & treated as completion of one year) .
In view of the decision i think he is eligible for Gratuity even if the organisation disputed.
Regards
Nimesh Paul
From India, Kochi
Calculating gratuity:
a) If you are covered Under the Payment of Gratuity Act, 1972:
Gratuity will be = wages*15/26*year of service.
Here wage refers to basic salary plus dearness allowance. Take the monthly salary drawn by you last (basic + dearness allowance) at the time of resignation or retirement. Divide this by 26. This gives you your daily salary. Multiply this amount by 15 days, and further by the number of years of service you have put in.
For computation of gratuity, your service period will be rounded off to the nearest full year.
Thus in your case service will be treated as five years.
b) If your are not covered Under the Payment of Gratuity Act, 1972:
For non-government employees, who are not covered under this Act, the manner of calculating gratuity is different.
First, the average salary is calculated: for this the average of last ten months’ salary is taken (this will include the basic plus dearness allowance plus commission as a percentage of turnover achieved by the employee). Divide this average salary by 30 (ignore fractions). Now, multiply this amount by 15 and further with the number of years of service put in. Dividing the daily salary by 30 instead of 26 does put those not covered by the Gratuity Act at a disadvantage.
Formula :- Gratuity shall be calculated as per following formula
Gratuity = Last drawn salary x ½ x No. of years of service
For computation of gratuity, your service period will not be rounded off to the nearest full year. While calculating completed years, any fraction of the year will be ignored. Thus your service will be treated as less than five years and is not entitled for gratuity.
ISHER KUMAR ARORA
From India, Delhi
a) If you are covered Under the Payment of Gratuity Act, 1972:
Gratuity will be = wages*15/26*year of service.
Here wage refers to basic salary plus dearness allowance. Take the monthly salary drawn by you last (basic + dearness allowance) at the time of resignation or retirement. Divide this by 26. This gives you your daily salary. Multiply this amount by 15 days, and further by the number of years of service you have put in.
For computation of gratuity, your service period will be rounded off to the nearest full year.
Thus in your case service will be treated as five years.
b) If your are not covered Under the Payment of Gratuity Act, 1972:
For non-government employees, who are not covered under this Act, the manner of calculating gratuity is different.
First, the average salary is calculated: for this the average of last ten months’ salary is taken (this will include the basic plus dearness allowance plus commission as a percentage of turnover achieved by the employee). Divide this average salary by 30 (ignore fractions). Now, multiply this amount by 15 and further with the number of years of service put in. Dividing the daily salary by 30 instead of 26 does put those not covered by the Gratuity Act at a disadvantage.
Formula :- Gratuity shall be calculated as per following formula
Gratuity = Last drawn salary x ½ x No. of years of service
For computation of gratuity, your service period will not be rounded off to the nearest full year. While calculating completed years, any fraction of the year will be ignored. Thus your service will be treated as less than five years and is not entitled for gratuity.
ISHER KUMAR ARORA
From India, Delhi
Though there is a ruling by Chennai High Court that even if an employee has worked for 240 days in the 5th Year he is eligible for Gratutity but that ruling is still debatable some organisation follows and some dont. As per law it is 5 years of continuous service w/o one day break...
From United Kingdom
From United Kingdom
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Gratuity-Contin uous Service-countin g broken period with same employer-Madras HC Judgment.docx
FORM-F-NOMINATI ON OF GRATUITY.pdf
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