Executive - Hr
Senior Officer-hr
+1 Other

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Dear all,I hav a doubt in gratuity...Actually gratuity will be given to employees who has completed 5 yrs of continuous service... This is stated in the Gratuity Act, 1972.But in IT companies, gratuity is deducted from the basic salary of the employees... they are deducting 4.81% of BP...Why they are deducting...? Gratutiy is one of the benefits of employee provided by the organization. but these IT companies are deducting from their employees itself...? Whats the reason...Please clear me...
From India, Madras
If your salary braeakup states CTC it’s Cost to the Company, which means any cost the company incurs for the employee will be mentioned (including gratuity) also.
From India, Bangalore
They are deducting since its a part of CTC (it is the cost which company incurs in employing a person) which includes contribution to the various funds (like PF, ESIC etc.) of employee and employer both.

From India, Bangalore
Thats true that Gratuity is the part of CTC. But when employee leave the company before 5 years term, the employor have to return back him the amount deducted per month from there salary in the name of Gratuity.
So those amount collected to given during Full and Final Settlement.

From India, Mumbai
Dear Saravanan,
Swarna, Swati and especially Ajay on the point of CTC as well gratuity are correct. What Ajay has stated is important and considerable.Becoz many companies are having same practice but at the time of payment in the form of full & final; it is casually forget to disburse the payment of gratuity deducted through the salary of employee who are having service less than 5years.
Well done Ajay.

From India, Kolhapur
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