Gratuity Eligibility = 4 yrs + 240 days
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Gratuity Eligibility = 4 yrs + 240 days

Parkorbit Started The Discussion:

MY FRIEND COMPLETED 4YRS + 240 DAYS ...IS He eligible for Gratuity? There is No part of gratuity in CTC === even after this can he claim gratuity? Pls advise. Thanks

G K Sharma - Member Since: Feb 2008
As per Payment of Gratuity Act, 1972, any employees become elegible for the gratuity when he has completed five years service. The employee who has worked for 240 days in a year, then a year is treated complete year. Since the employee has completed four years and 240 days, he/she will be elegible for gratuity but after the completion of five years whether works for remaining period beyound 240 days or not.

G K Sharma

Madhu.T.K - Member Since: Sep 2007
The date of completion of 5 years will be taken from the date of joing to the date of leaving service. The issue of 240 days comes only to decide continuous service. Therefore, if one works for 4 years and 240 days, it is not neccessary that he is eligible for gratuity but on the date of leaving he should have 5 years total service.

Regards,

Madhu.T.K

nand kumar - Member Since: Aug 2007
Dear

Your friend is eligable for gratuity.As per Income Tax Act 1961 If his company cover under Payment of gratuity Act then the Days/Month Fraction is add as a next year.

But Please take legal Advice also

Regards
N.khopade

ANANTHESWARAN N.E - Member Since: Mar 2008
he will be entiled for gratuity for 5 years . this is because he has worked for 240 days which is above 6 months and if the fraction months is 6 or aove, then the fraction is added to consider one complete year

mike1957 - Member Since: Mar 2007
Hi,

what is a year of service under Gratuity act?.
An Year of service means, for the purpose of calculation gratuity, he should have worked for 240 days in that calendar year. For an instance an employee had worked for more 7 years and his no of days worked in each are as follows:

Assume that the total No of days per year is 303 days
1 st year: 300 days
2nd year: 255 days
3rd year: 298 days
4th year: 129 days
5th year: 310 days
6th year: 110 days
7th year : 303 days

Now the employee is eligible for five years since he has not completed 240 days which is the eigible criteria for two years. But normally 99.99% of the companies are not following this.

But application of the Act is extended to those who have completed 4 yrs and 240 days in the fifth year. For calculation purpose the gratuity is calculated in multiplicity of 6 months. That is if an employee completes 6.7 yrs the gratuity is to be calculated for 7 years.

Hope I am clear.

Regards
Michael Nicholas

Madhu.T.K - Member Since: Sep 2007
As pointed out by me in my earlier posting, the date on which one completes 5 years of service with reference to his joining is the date on which he becomes eligible for gratuity. One who joined on 1-1-2003 becomes eligible to get gratuity on 1-1-2008. If he leaves during 2007 but working for 240 days in 2007, cannot get gratuity as per the Payment of Gratuity Act. In P.Raghavalu and Sons Vs. Additional Labour Court, Andhra Pradesh, it was decided that one who had worked for 4 years, 11 months and 10 days (just 20 days short) was not eligible for gratuity saying that the qualifying phrase "fraction of period exceeding six month shall be taken as one year" will be considered for deciding the amount of gratuity and not for deterning the eligibility for gratuity.

I heard that there is some other judgement against this ruling permitting those with 4 years + 6 months to get gratuity. But the intrepretation of the Act is to take 5 years from the date of joining to date of leaving.

The fraction of six months and 240 days are considered for determining the amount of gratuity. As such one who has worked for 6 years and 7 months will get gratuity for 7 years.

Regards,

Madhu.T.K

smita244 - Member Since: Mar 2007
Hi... i got a query related to the same subject. If the gratuity is inculded in the employee's CTC and the employee leaves the organisation before the completion of 5 years. will he be elgible for the gratuity...

Madhu.T.K - Member Since: Sep 2007
No. Not at all. Showing the gratuity payable on discharge or leaving or on superannuation in the monthly salary itself is a wrong practice followed by the new generation companies. Gratuity will not accrue right from the beginning. It is not payable during the service period, but it is payable only when an employee leaves after completing 5 years or dies while in service. The gratuity and reimbursements are shown as salary (CTC) just to lure employees. It is cheating. It is not paid every month. But it is payable only after 5 years and that also only when he leaves. Therefore, even if the gratuity shown as part of CTC, it will not be paid until he completes 5 years and leaves.

Regards

lovejin143 - Member Since: Dec 2008
i also have a same issue ........ i m working for an organisation in India since 21st june 2004 and have to join the Head Office of the same organisation abroad on 15th March 2009. Though it is the same organisation and i m completing the 4yrs and 240 days of employment shall i be eligible for the gratuity from office in INDIA?

Please reply soon.



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