22 October 2012
If the employee is covered under Payment of Gratuity Act then
Gratuity = Basic x No. of years of service x 15/26. Here part of months would be treated as a year. Suppose the service term of any employee is 13 years and 7 months, it would be treated as 14 years.
If the employee is not covered under Payment of Gratuity Act then
Gratuity = Basic x No. of years of service x 15/30. Here part of month would be excluded. In this case, taking the above example, the No. of years of service would be taken as 13 years.
The amount of Gratuity in any case won't exceed Rs 10 Lakhs.
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