gratuity
This query is : Resolved
17 August 2010
Which Rate gratuity deduct from salary
17 August 2010
gratuity is payable by employer and not deductible from salary of employee.
even in case gratuity is part of ctc, it should not be shown as deduction in pay slip. its illegal.
even in case gratuity is part of ctc, it should not be shown as deduction in pay slip. its illegal.
17 August 2010
Gratuity is a retirement benefit and not deducted from salary.
In brief:
PAYMENT OF GRATUITY ACT, 1972
Application
1. This act applies to Every factory, mine oil field, plantation, port and railway company; Every shop or establishment within the meaning of any law in relation to shops and establishments in a state in which 10 or more persons are employed on any day of the preceding 12 months; Every such other establishments in which in which 10 or more persons are employed on any day of the preceding 12 months as notified by central government.
2. Gratuity is payable to an employee on the termination of his employment after his continuous service of not less than 5 years (not applicable in case of death or disablement).
In the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
3. For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Explanation: In the case of a monthly rated employee, the fifteen days’ wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
4. The amount of gratuity payable to an employee shall not exceed Ten lakhs rupees.
5. The gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.
6. The gratuity payable to an employee may be wholly or partially forfeited—
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employ¬ment.
7. An employee who is eligible for payment of gratuity under the Act, or any person authorised in writing, to act on his behalf, shall apply ordinarily within thirty days from the date the gratuity became payable, in Form ‘I’ to the employer.
8. Each employee, who has completed one year of service may make nomination. The nomination shall be in Form ‘F’ and submitted in duplicate by personal service by the employee, after taking proper receipt or by sending through registered post acknowledgement due to the employer,—
(i) in the case of an employee who is already in employment for a year or more on the date of commencement of these rules, ordinarily, within ninety days from such date, and
(ii) in the case of an employee who completes one year of service after the date of commencement of these rules, ordinarily, within thirty days of the completion of one year of service :
9. Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees or with both.
An employer who contravenes, or makes default in complying with, any of the provisions of this Act or any rule or order made there-under shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both:
Provided that where the offence relates to non-payment of any gratuity payable under this Act, the employer shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to two years unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice.
10. No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section shall be liable to attach¬ment in execution of any decree or order of any civil, revenue or criminal court.
In brief:
PAYMENT OF GRATUITY ACT, 1972
Application
1. This act applies to Every factory, mine oil field, plantation, port and railway company; Every shop or establishment within the meaning of any law in relation to shops and establishments in a state in which 10 or more persons are employed on any day of the preceding 12 months; Every such other establishments in which in which 10 or more persons are employed on any day of the preceding 12 months as notified by central government.
2. Gratuity is payable to an employee on the termination of his employment after his continuous service of not less than 5 years (not applicable in case of death or disablement).
In the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
3. For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Explanation: In the case of a monthly rated employee, the fifteen days’ wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
4. The amount of gratuity payable to an employee shall not exceed Ten lakhs rupees.
5. The gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.
6. The gratuity payable to an employee may be wholly or partially forfeited—
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employ¬ment.
7. An employee who is eligible for payment of gratuity under the Act, or any person authorised in writing, to act on his behalf, shall apply ordinarily within thirty days from the date the gratuity became payable, in Form ‘I’ to the employer.
8. Each employee, who has completed one year of service may make nomination. The nomination shall be in Form ‘F’ and submitted in duplicate by personal service by the employee, after taking proper receipt or by sending through registered post acknowledgement due to the employer,—
(i) in the case of an employee who is already in employment for a year or more on the date of commencement of these rules, ordinarily, within ninety days from such date, and
(ii) in the case of an employee who completes one year of service after the date of commencement of these rules, ordinarily, within thirty days of the completion of one year of service :
9. Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees or with both.
An employer who contravenes, or makes default in complying with, any of the provisions of this Act or any rule or order made there-under shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both:
Provided that where the offence relates to non-payment of any gratuity payable under this Act, the employer shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to two years unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice.
10. No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section shall be liable to attach¬ment in execution of any decree or order of any civil, revenue or criminal court.
17 August 2010
Agreed with Mr. Arora,
but only for CTC calculation purpose > its 4.81 % of Basic+DA
but only for CTC calculation purpose > its 4.81 % of Basic+DA
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