Query On Payment Of Gratuity Act, 1972 - PDF Download

Dear All,

I have the following query/confusion regarding provisions/practices under "The Payment of Gratuity Act, 1972". Is the ceiling of Rs. 3.50 lakhs towards the maximum gratuity payable under the Payment of Gratuity Act or the maximum amount exempted under the Income Tax Act?

Regards,
Gaurang Sheth

Dear Mr. Gaurang,

The amount of Rs. 3.50 lakhs is the maximum eligibility for Gratuity as per the Gratuity Act.

Regards,
Santosh Iyer

Hello, Mr. Iyer,

Thank you for your reply to my query. Does this mean that if at the time of resigning or retiring, 15 days of salary multiplied by the number of years of service is more than 3.50 lakhs, legally, the employee cannot claim gratuity above 3.50 lakhs?

Regards,
Gaurang Sheth

Sir,

Please provide me with the revised notification for the increase in the payment of Gratuity from 3.5 to 10.00 lac, if any.

Dear,

The maximum gratuity limit is still Rs. 3.5 lacs. The matter is under process.

With Regards,
R.N.Khola

1. What is the basic information required for the settlement of gratuity under the Payment of Gratuity Act, 1972?

2. An employee who has worked in any organization for 20 years or more, is it compulsory to check his/her all increment details i.e. annual increment/salary fixation which are recorded in the service book at the time of payment of gratuity due to retirement/resignation/death?

3. Any amount which has been contributed in excess towards the employer's share in the PF account due to wrong salary fixation/increment or any other reason, can this employer contribution amount be recoverable from the payable gratuity to the employee due to retirement/resignation/death?

Arun Saxena, M/s Nav Bharat, Delhi, 9911542883

Dear Saxena,

Gratuity is payable if an employee has completed continuous service of 5 years as per Section 2A of the Gratuity Act 1972.

For the calculation of gratuity, the present salary is taken into consideration using the following formula:
Monthly salary * 15 * Number of years of continuous service / 26

Thank you.

Date: 25/10/2010

Dear Sir,

I have not received an answer to my third question. Kindly review my third question again. My query is as follows:

1. Is any amount that has been contributed in excess towards the employer's share in the PF account, due to wrong salary fixation/increment or any other reason, recoverable from the payable gratuity to the employee upon retirement/resignation/death?

Arun Saxena
M/s Nav Bharat
Delhi, 9911542883

Dear Mr. Saxena,

1) For the settlement of gratuity under the Payment of Gratuity Act, 1972, you need to ensure a minimum of 5 years of continuous service from the employee and calculate the gratuity based on their last drawn Basic Salary. Apply the formula to calculate the gratuity.

2) There is no need to check the employee's past increment records to compute the gratuity; only the last drawn Basic salary is sufficient.

3) Any excess contribution made in the PF account cannot be recovered from the gratuity amount because the controlling authorities for both acts are different and hence cannot be adjusted.

Regards,
Uday Raverkar
Dy. Manager-HR
RSIL-Indore

Dear Sir,

If the gratuity limit is increased from 3.5 lac to 10 lac, could you please share the notification for the same?

Regards,
Anand

Dear Anand,

Please find attached herewith the required notification.

R.N.KHOLA (LL&IR) Welcome Skylark Associates

Dear Seniors,

I have joined the new company, and I have a query regarding an X employee who left the company after 4 years, 6 months, and 20 days. I am curious to know if he is eligible for gratuity or not.

Thank you.

Dear Akhilesh,

In our opinion, your former employee is not entitled to gratuity under the Payment of Gratuity Act, 1972.

R.N. Khola

Dear Seniors,

My friend has joined a new organization where, up to now, there has been no gratuity scheme. However, the management now wants to implement it for those employees who have worked around 10+ years in the organization.

Thank you.

I am working in a college registered under society registration. This college was registered in 1995. I have been working here since 2000. Would I be eligible for gratuity from the year 2000 until today if I resign today?