Dear Sir/ Madam,
I am consfused regarding, this:
In case an Employee has served in an organisation for 5 years and 8 months. So, his period of service is considered to be 6 years.
So, while calculating the gratuity, in the formula, ( no.of years served) we need to take 6 years or only one year (because after completion of 5 yrs, one year he has completed...
kindly help me.....
From India, Mumbai
1I am consfused regarding, this:
In case an Employee has served in an organisation for 5 years and 8 months. So, his period of service is considered to be 6 years.
So, while calculating the gratuity, in the formula, ( no.of years served) we need to take 6 years or only one year (because after completion of 5 yrs, one year he has completed...
kindly help me.....
From India, Mumbai
Gratuity calculation
= (Salary / 26) x 15 x Number of years in service
Where;
Salary is โLast drawn basic pay + DAโ
26 is the average working days in a month (As per Gratuity rules โ 26 days not 30 days calculated)
15 is the actual days considered for gratuity in a year
Source: http://onerupee.net/calculate-your-gratuity-in-india/
From India, Bangalore
= (Salary / 26) x 15 x Number of years in service
Where;
Salary is โLast drawn basic pay + DAโ
26 is the average working days in a month (As per Gratuity rules โ 26 days not 30 days calculated)
15 is the actual days considered for gratuity in a year
Source: http://onerupee.net/calculate-your-gratuity-in-india/
From India, Bangalore
Query - if employee has completed 5 years with the same organization but he got an thrice increment in that duration and his Basic was revised every time. so can we calc. his gratuity as per no of years * basic or should direct calcu. 5 years with current basic as he is drawing??
pls guid
From India, Khambhat
pls guid
From India, Khambhat
Hi team
Thanks for the lovely info.
I am into my present organization,where fortunately or unfortunately i am leaving my present post exactly after 4.7 years.... (Including my last working day)
Kindly lf any body can tel me wud i be able to apply for my gratuty ??
Thank you.
From India, Hyderabad
Thanks for the lovely info.
I am into my present organization,where fortunately or unfortunately i am leaving my present post exactly after 4.7 years.... (Including my last working day)
Kindly lf any body can tel me wud i be able to apply for my gratuty ??
Thank you.
From India, Hyderabad
Hello,
I have joined in GTL limited India on 1st June 2008. 16th June 08. GTL sent me Tanzania. Salary paid from there & stopped Indian salary although they sent me in deputation. July'10 I came back india. July'10 & August'10 They paid me 70% as salary advance. The salary paid it was decided at joing time. Again they sent me in Nepal Sep'10. I have been paid by Nepal GTL only. I worked there till 15th July'12. 16th July'12 they sent me to Myanmar. I continue work till june'15. HR request me to resign in GTL India. I send resign letter in India GTL on 23rd June 2015.
My question are: 1- Am I eligible for Gratuty?
2- Which salary will considered as last drawn salary.
Please reply me, thanks Soumen Das
From Myanmar [Burma], undefined
I have joined in GTL limited India on 1st June 2008. 16th June 08. GTL sent me Tanzania. Salary paid from there & stopped Indian salary although they sent me in deputation. July'10 I came back india. July'10 & August'10 They paid me 70% as salary advance. The salary paid it was decided at joing time. Again they sent me in Nepal Sep'10. I have been paid by Nepal GTL only. I worked there till 15th July'12. 16th July'12 they sent me to Myanmar. I continue work till june'15. HR request me to resign in GTL India. I send resign letter in India GTL on 23rd June 2015.
My question are: 1- Am I eligible for Gratuty?
2- Which salary will considered as last drawn salary.
Please reply me, thanks Soumen Das
From Myanmar [Burma], undefined
HI,
You can below given link for calculation of gratuity :
Gratuity Calculator: Online Gratuity Calculator to find the Gratuity
You can below given link for calculation of gratuity :
Gratuity Calculator: Online Gratuity Calculator to find the Gratuity
Gratuity is a benefit received by an employee for services rendered to an organization. For companies covered under the Gratuity Act, this benefit is paid when an employee completes five or more years of service with the employer. An employee gets gratuity when he/she resigns, retires or is laid off. In case of death or disablement there is no minimum eligibility period.
How Gratuity is Calculated
The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26.
According to this formula, the time period of over six months or more is considered as one year.
This means if you have completed five years and seven months of service, the number of years would be considered as six years for calculation of gratuity benefit.
On the other hand, if the service period is five years and five months, for gratuity calculation it will be considered five years.
An employer can however give higher gratuity than the amount under the prescribed formula.
Maximum Amount
For government employees, Rs. 20 lakh is the maximum amount that can be paid as gratuity. The Seventh Pay Commission had recommended increase in the gratuity ceiling to Rs. 20 lakh from the earlier level of Rs. 10 lakh.
Income Tax Treatment of Gratuity
For government employees, entire amount of gratuity received on retirement or death is currently exempted from income tax.
In case of non-government employees, income tax rules on gratuity are applicable depending on whether employees are covered under the Payment of Gratuity Act, 1972 or not.
For non-government employees covered under the Gratuity Act, the income tax exemption on any gratuity received is least of the following:
Maximum amount specified by the government which is currently Rs. 10 lakh
Last drawn salary X 15/26 X years of service
Actual gratuity received
For example, the last drawn salary (basic plus DA) of Mr Ashish, for example, is Rs. 60,000 (per month) and he has worked for 25 years. The gratuity according to the formula is Rs. 8.65 lakh but suppose he has actually received gratuity of Rs. 12 lakh.
So for income tax calculation, Rs. 8.65 lakh will be considered for exemption. So Mr Ashish will pay tax on Rs. 3.35 lakh (Rs. 12 lakh - 8.65 lakh).
For non-government employees not covered under the Payment of Gratuity Act, the income tax exemption on any gratuity received is least of the following:
Half month's average salary for each completed year of service
Maximum amount specified by the government which is currently Rs. 10 lakh
Actual gratuity received
(Average monthly salary is to be computed on the basis of average of salary for 10 months immediately preceding the month (not the day) of retirement)
For example, the last drawn salary (basic plus DA) of Mr Bhupesh, for example, is Rs. 70,000 and he has worked for 35 years. The gratuity according to the formula is Rs. 12.25 lakh and he has received this amount as gratuity. For tax purposes, Rs. 10 lakh would be considered as exemption limit as it is the lowest of the three factors. So Mr Bhupesh will have to pay tax on Rs. 2.25 lakh (Rs. 12.25 lakh - Rs. 10 lakh).
From India
How Gratuity is Calculated
The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26.
According to this formula, the time period of over six months or more is considered as one year.
This means if you have completed five years and seven months of service, the number of years would be considered as six years for calculation of gratuity benefit.
On the other hand, if the service period is five years and five months, for gratuity calculation it will be considered five years.
An employer can however give higher gratuity than the amount under the prescribed formula.
Maximum Amount
For government employees, Rs. 20 lakh is the maximum amount that can be paid as gratuity. The Seventh Pay Commission had recommended increase in the gratuity ceiling to Rs. 20 lakh from the earlier level of Rs. 10 lakh.
Income Tax Treatment of Gratuity
For government employees, entire amount of gratuity received on retirement or death is currently exempted from income tax.
In case of non-government employees, income tax rules on gratuity are applicable depending on whether employees are covered under the Payment of Gratuity Act, 1972 or not.
For non-government employees covered under the Gratuity Act, the income tax exemption on any gratuity received is least of the following:
Maximum amount specified by the government which is currently Rs. 10 lakh
Last drawn salary X 15/26 X years of service
Actual gratuity received
For example, the last drawn salary (basic plus DA) of Mr Ashish, for example, is Rs. 60,000 (per month) and he has worked for 25 years. The gratuity according to the formula is Rs. 8.65 lakh but suppose he has actually received gratuity of Rs. 12 lakh.
So for income tax calculation, Rs. 8.65 lakh will be considered for exemption. So Mr Ashish will pay tax on Rs. 3.35 lakh (Rs. 12 lakh - 8.65 lakh).
For non-government employees not covered under the Payment of Gratuity Act, the income tax exemption on any gratuity received is least of the following:
Half month's average salary for each completed year of service
Maximum amount specified by the government which is currently Rs. 10 lakh
Actual gratuity received
(Average monthly salary is to be computed on the basis of average of salary for 10 months immediately preceding the month (not the day) of retirement)
For example, the last drawn salary (basic plus DA) of Mr Bhupesh, for example, is Rs. 70,000 and he has worked for 35 years. The gratuity according to the formula is Rs. 12.25 lakh and he has received this amount as gratuity. For tax purposes, Rs. 10 lakh would be considered as exemption limit as it is the lowest of the three factors. So Mr Bhupesh will have to pay tax on Rs. 2.25 lakh (Rs. 12.25 lakh - Rs. 10 lakh).
From India
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