Gratuity payment clarification - urgent

Others 3060 views 4 replies

Vineet

85 Points Joined April 2010

Hi,

I joined BACS on 21st January 2008 and my last working day was 7th Mar 2011. The company used to deduct 4.81% of Basic each year and show it in the CTC. My query is what amount of Gratuity I should have received - as per the company's calculation or the basic formula?

Below are the clarifications I received from my company relating to Gratuity payment. . I would like to know if the below calculations are correct or should the payment be made as per Basic*15*(number of years)/26. Please advise. URGENT

Ø Please be informed that for legacy BACS associates who are on the roles of the company as on 31^st March 2009, Ex-gratia (TaxableGratuity) is paid if the associate leaves organization in less than 4 years 240 days.

Ex-gratia is calculated as follows –

4.81% on their accumulated Basic from the Date of Joining till your Last Working Day.

Ø The calculation of Basic*15/26*no of years is as per the Provisions of the Gratuity Act who completes 4 years 240 days of service with the company. Since your hire date is 21^st January 2008 you will not be eligible for Gratuity Payment

Thanks,

Vineet

Replies (4)

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

graduity payment is not eligible below 5 years ( precise way 4 years +240 working days)

CA Saiyum khan

Practicing CA

690 Points Joined November 2008

Originally posted by : Vineet
	Hi, I joined BACS on 21st January 2008 and my last working day was 7th Mar 2011. The company used to deduct 4.81% of Basic each year and show it in the CTC. My query is what amount of Gratuity I should have received - as per the company's calculation or the basic formula? Below are the clarifications I received from my company relating to Gratuity payment. . I would like to know if the below calculations are correct or should the payment be made as per Basic15(number of years)/26. Please advise. URGENT Ø Please be informed that for legacy BACS associates who are on the roles of the company as on 31st March 2009, Ex-gratia (TaxableGratuity) is paid if the associate leaves organization in less than 4 years 240 days. Ex-gratia is calculated as follows – 4.81% on their accumulated Basic from the Date of Joining till your Last Working Day. Ø The calculation of Basic15/26no of years is as per the Provisions of the Gratuity Act who completes 4 years 240 days of service with the company. Since your hire date is 21st January 2008 you will not be eligible for Gratuity Payment Thanks, Vineet

You are not eligible for gratuity since you had not been in continuous service of speicified period i.e. 5 years. So what has been shown to you by your company as a part of CTC you would be entitled for that only.

jagdishkmunnar@gmail.com

24 Points Joined March 2011

Hi,

By virtue of the Payment of Gratuity Act/Rules, an employee who has completed five years of uninterrupted service under one Employer is eligible for Gratuity. The only exemption of this condition is for the employees who expired or medically unfit, but those has completed one year or more uninterrupted service under one Employer.

According to a latest verdiction from the Court, an employee who has completed uninterrupted service of four years and 240 days or more during the fifthe year is also eligible.

Since you have not attained the basic service crieteria, you are not eligible for Gratuity, as per the Act.

Thanks,

Jagdish.K