05 August 2010
Hello Expert, Want to know the process flow in gratuity right from its deduction from employees salary..premium payment...trust formation with LIC....payment to employee on resignation...does LIC pay the gratuity or the company?? the files section has data mostly on gratuity calculation.
06 August 2010
First of all gratuity is not deducted from employee's salary company pays the gratuity and not LIC. Give me your ID i will mail you a file please check that.
06 August 2010
An employee who leaves before 5 years of service is not eligible for gratuity. Moreover, gratuity is a payment by the employer alone and not a 'contribution' to provident fund or ESI. The system of showing gratuity as Cost to Company and deducting the same right from the first salary is illegal and should be discouraged.
07 August 2010
Vinod ji, Pls confirm whether this is correct.
I thought that company pays yearly premium to LIC based on deductions from salary and when a employee leaves after 5 yrs of service then LIC pays gratuity to the employee.
CAclubindia
