Graguaity Calculation
This query is : Open
21 July 2008
I have to Pay gratuaty to some of my staff. One Mrs. Geeta completed 16 years & retiring form service after attaining the supper annuation period on Aug' 08. And also I want to pay the gratuity to those staff who is still working & completed nearly 15 plus years of service and will continue another 10 Yrs.
thanks, If any one give detail of calculating the Gratuity.
Azmathullah Khan
I have to Pay gratuaty to some of my staff. One Mrs. Geeta completed 16 years & retiring form service after attaining the supper annuation period on Aug' 08. And also I want to pay the gratuity to those staff who is still working & completed nearly 15 plus years of service and will continue another 10 Yrs.
thanks, If any one give detail of calculating the Gratuity.
Azmathullah Khan
21 July 2008
Dear Sir
this link is usefull to you.
http://www.ndtvprofit.com/Calculators/gratuity.htm
# last drawn monthly salary as on date is taken into account
# if total period served with the current employer is less than 5 years no gratuity is payable to any individual
# for calculation of gratuity period served at a stretch with one employer is counted
# salary includes only basic pay and dearness allowance
# seasonal establishments are not covered in this calculator
# salary remains same for the last ten month
# only commission on salary paid on turnover basis is included
Note
Gratuity is a lump sum amount that your employer pays you when you retire or resign from the organization. An Employee does not contribute any portion of his salary towards this amount.
Gratuity is paid out at the time of superannuation (if you retire at the age of 58), when you retire (at any other age) or resignation, and in the event of your death or being rendered disable because of an accident or illness. You need to have at least five full years of service with an employer to qualify for gratuity. This rule is relaxed in the last instance. In the event of your death, the gratuity will be paid to your nominee.
CASE-1 You are covered Under the Payment of Gratuity Act, 1971:
Gratuity shall be calculated as per the below formula:
Gratuity = Last drawn salary x 15/26 x No. of years of service
Your last drawn salary will comprise your basic + DA. For computation of gratuity, your service period will be rounded off to the nearest full year.
CASE-2 You are not covered Under Payment of Gratuity Act, 1971
Gratuity shall be calculated as per the below formula
Gratuity = Last drawn salary x ½ x No. of years of service
Your last drawn salary will comprise your basic + DA+ commission on sales on turnover basis. 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. For instance, if the employee has a total service of 20 years, 10 months and 25 days, only 20 years will be factored into the calculation.
GRATUITY EXEMPTION:
Death-cum-retirement gratuity received by employees of central or state governments and local authorities is exempt without limit.
Gratuity received under the Payment of Gratuity Act, 1971 is exempt to the extent that it does not exceed 15 days' salary for every completed year of service calculated on the last drawn salary subject to a maximum of Rs 3.5 lakh.
Any other gratuity is exempt to the extent that it does not exceed one half-month salary’s for each year of completed service calculated on the basis of average salary for 10 immediately preceding months subject to a maximum of Rs 3.5 lakh.
The ceiling of Rs 3.5 lakh applies to the aggregate of gratuity received from one or more employers in the same or different years.
this link is usefull to you.
http://www.ndtvprofit.com/Calculators/gratuity.htm
# last drawn monthly salary as on date is taken into account
# if total period served with the current employer is less than 5 years no gratuity is payable to any individual
# for calculation of gratuity period served at a stretch with one employer is counted
# salary includes only basic pay and dearness allowance
# seasonal establishments are not covered in this calculator
# salary remains same for the last ten month
# only commission on salary paid on turnover basis is included
Note
Gratuity is a lump sum amount that your employer pays you when you retire or resign from the organization. An Employee does not contribute any portion of his salary towards this amount.
Gratuity is paid out at the time of superannuation (if you retire at the age of 58), when you retire (at any other age) or resignation, and in the event of your death or being rendered disable because of an accident or illness. You need to have at least five full years of service with an employer to qualify for gratuity. This rule is relaxed in the last instance. In the event of your death, the gratuity will be paid to your nominee.
CASE-1 You are covered Under the Payment of Gratuity Act, 1971:
Gratuity shall be calculated as per the below formula:
Gratuity = Last drawn salary x 15/26 x No. of years of service
Your last drawn salary will comprise your basic + DA. For computation of gratuity, your service period will be rounded off to the nearest full year.
CASE-2 You are not covered Under Payment of Gratuity Act, 1971
Gratuity shall be calculated as per the below formula
Gratuity = Last drawn salary x ½ x No. of years of service
Your last drawn salary will comprise your basic + DA+ commission on sales on turnover basis. 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. For instance, if the employee has a total service of 20 years, 10 months and 25 days, only 20 years will be factored into the calculation.
GRATUITY EXEMPTION:
Death-cum-retirement gratuity received by employees of central or state governments and local authorities is exempt without limit.
Gratuity received under the Payment of Gratuity Act, 1971 is exempt to the extent that it does not exceed 15 days' salary for every completed year of service calculated on the last drawn salary subject to a maximum of Rs 3.5 lakh.
Any other gratuity is exempt to the extent that it does not exceed one half-month salary’s for each year of completed service calculated on the basis of average salary for 10 immediately preceding months subject to a maximum of Rs 3.5 lakh.
The ceiling of Rs 3.5 lakh applies to the aggregate of gratuity received from one or more employers in the same or different years.
21 July 2008
Thanks
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- TDS U/S. 194NF
- GST on export of services and Input Credit
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- GST ON EXPORT COMMISSION
- Should I report my US salary for January, February, March in Schedule FA?
- Inventory of finished goods
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
