Hi
One of our employee worked 4 years 5 months with our organisation,we have explain him Gratuity payable to any employee after completion of five year service.He is claiming for Gratuity on the basis of Gratuity amount mentioned in his CTC.
Kindly guide me can he claim the Gratuity on the basis of Gratuity amount mentioned in his CTC.
With Regards
Rakesh Dubey
From India, Raipur
1One of our employee worked 4 years 5 months with our organisation,we have explain him Gratuity payable to any employee after completion of five year service.He is claiming for Gratuity on the basis of Gratuity amount mentioned in his CTC.
Kindly guide me can he claim the Gratuity on the basis of Gratuity amount mentioned in his CTC.
With Regards
Rakesh Dubey
From India, Raipur
dear he is not entitle for gratuity as he has not completed 5 years of service . tks j s malik
From India, Delhi
From India, Delhi
Gratuity is a cost to company only when employee completes 5 years of term. Including the same in CTC is advisable to only those companies who have created a seperate "Gratuity Trust" and are transfering the annual contribution to this "Gratuty Trust's " account. Only in this case is that they can justify the reason for including the same in CTC.
A company mentioning gratuity in CTC and does not have a seperate "Gratuityu Trust" is a dangerous proposition.
You are still legally immune because completion of 5 years (or atleast 4 years and 240 days) is must for payment of gratuity but I am aware of few cases which are pending in courts on the same subject stating this addition of gratuity in CTC as "representation of misguiding facts".
Conclusion
Continue this practice only if your company has a seperate "gratuity trust", if not, create one now.
Gaurav
From India, Hyderabad
A company mentioning gratuity in CTC and does not have a seperate "Gratuityu Trust" is a dangerous proposition.
You are still legally immune because completion of 5 years (or atleast 4 years and 240 days) is must for payment of gratuity but I am aware of few cases which are pending in courts on the same subject stating this addition of gratuity in CTC as "representation of misguiding facts".
Conclusion
Continue this practice only if your company has a seperate "gratuity trust", if not, create one now.
Gaurav
From India, Hyderabad
i am working in pvt. ltd. company in 4 years 9 months 25 days. can i am eligiable for gratuity as per act or not eligiable. Pls. advise me. if eligiable, send he proof of act.
From India, Delhi
From India, Delhi
dear as you have not completed 5 years of service ,so you are not entitle for gratuity.see applicablity clause of gratuity act. regards j s malik
From India, Delhi
From India, Delhi
Dear Rakesh,
It is illegal practice or hiding the fact to mention a gratuity in CTC. You have done this wrong. Well form the employee side - employee is not eligible for any Gratuity as he is not complited his five years of service.
Regards,
Pankaj Chandan
From India, New delhi
It is illegal practice or hiding the fact to mention a gratuity in CTC. You have done this wrong. Well form the employee side - employee is not eligible for any Gratuity as he is not complited his five years of service.
Regards,
Pankaj Chandan
From India, New delhi
Dear Malik Sir,
Payment of Gratuity Act, 1972
From India, Delhi
I heard someone,who are working as a sr. position in HR dept. According to him, if a person like X has worked 4 years & 6 months, then it converted to 5 years (because as per caculation we take round off ) then the said person is entitled for gratuity.
pls. clear the same?
also pls clear the below statement.
Thanks in advance.
Best Regards
P.C.Gupta
pls. clear the same?
also pls clear the below statement.
Thanks in advance.
Best Regards
P.C.Gupta
Payment of Gratuity Act, 1972
Section: 4A
Compulsory insurance
(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:
Provided that different dates may be appointed for different establishments or class of establishments or for different areas.
(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement and every employer employing five hundred or more persons who establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).
(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).
(4) The appropriate Government may, by notification, make rules to give effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of the approved gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has been taken under sub-section (1), or as the case may be, the Board of Trustees of the approved gratuity fund.
(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of 'contribution to all approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.
(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.
Explanation : In this section "approved gratuity fund" shall have the same meaning as in clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961
Compulsory insurance
(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:
Provided that different dates may be appointed for different establishments or class of establishments or for different areas.
(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement and every employer employing five hundred or more persons who establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).
(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).
(4) The appropriate Government may, by notification, make rules to give effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of the approved gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has been taken under sub-section (1), or as the case may be, the Board of Trustees of the approved gratuity fund.
(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of 'contribution to all approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.
(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.
Explanation : In this section "approved gratuity fund" shall have the same meaning as in clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961
From India, Delhi
dear p c
you have raised two points
1.if someone has completed 4 years and 6 month ,than he should be entitle to get gratuity as 6 month is converted to one year----it is absolutely worng 6 month can not be converted to one year in case of applicablity,however for calculating of gratuity 6 month or more is counted as year.in one case madras high court has gvien judgement
that if an individual haas completed 240 days in fifth year than he should be entitled for gratuity.but by this judgement there is no amendment in gratuity act and applicablity clause still say five years.
2.this section 4A is not yet notified after notification by the appropriate authority ,it will be included in act than only grtuity will be through insurance.
regards
j s malik
From India, Delhi
you have raised two points
1.if someone has completed 4 years and 6 month ,than he should be entitle to get gratuity as 6 month is converted to one year----it is absolutely worng 6 month can not be converted to one year in case of applicablity,however for calculating of gratuity 6 month or more is counted as year.in one case madras high court has gvien judgement
that if an individual haas completed 240 days in fifth year than he should be entitled for gratuity.but by this judgement there is no amendment in gratuity act and applicablity clause still say five years.
2.this section 4A is not yet notified after notification by the appropriate authority ,it will be included in act than only grtuity will be through insurance.
regards
j s malik
From India, Delhi
Sir I fully agree with the view expressed by sr.member Mr Malik. For qualifying gratuity payment five yrs continuous service is must and there is no provision of round off 6 months or above to treat one year.
From India, Koraput
From India, Koraput
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