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      Benefits Calculation Under Gratuity Act

      Saturday, December 16th, 2017 Amritesh one response

      Gratuity is provided to Employees in recognition of their service rendered to the Organization. The minimum tenure of service to be eligible for Gratuity is 5 years (4 years and 240 days). Benefits Calculation Under Gratuity Act is simple and easy to understand. In my earlier post I have discussed about the Gratuity Act, 1972 and the salient features of the act. Here I would discuss the calculation of Gratuity and Tax Liability on the same. Refer to the link shared below. Gratuity Act 1972 HOW DOES IT WORK? Every employer has to obtain insurance for his liability to pay gratuity from a Life Insurer. But if an employer has already established an approved Gratuity Fund [as per Section 2(5)…

      Payment of Gratuity Act

      Friday, December 15th, 2017 Amritesh no responses

      Gratuity is a benefit extended to the Employees in gratitude of the service rendered to the Organization/Employer. Gratuity like other Statutory Benefits like Provident Fund and Pension Fund is received by the employee at the end of their employment tenure. Gratuity Act was introduced in 1972 as Payment of Gratuity Act, 1972. However in the Appointment Letter, Annual Increment letter you will find CTC includes the Gratuity as well. In fact, while arriving at Cost to Company (CTC) for an employee, the gratuity is calculated as 4.83% of the Salary. Thus it is a component of Individual’s Compensation package (Salary). Now let’s understand the Gratuity Act and benefits for the employees’. Applicability The Act is applicable to:- Every factory, mine,…

      Amendments In Payment Of Gratuity Act: Proposed

      Sunday, February 26th, 2017 Amritesh 24 responses

      Gratuity Payment Act is expected to be amended soon. In the recently concluded tripartite meeting it has been decided that the Tax Free Gratuity limit to be enhanced to Rs 20 lakhs from Rs 10 lakhs to bring it at par with the Government employees who enjoy similar benefits as per the recommendations of the 7th Pay Commission. Official Notification on the same is expected soon. Few more amendments in Payment of Gratuity Act has been proposed. The recommendation to increase the Tax Free Gratuity to Rs 20 lakhs has been agreed upon by the Labour Ministry and the Central Unions. The move will benefit Individuals employed in the private sectors. Along with it, host of other reforms were also…