Dear All,
I want to understand if gratuity can be deducted, as i have seen so many MNC companies deducting gratuity on a monthly basis which I really think is not a legal practice or at par with Payment of Gratuity Act, 1972 as it a kind of benefit which the company provides to their employees after 5 years of their contributory services to that organisation or post retiement, permanent disablement due to an accident & therefore I believe there is no point in deducting it from employee's salary monthly.
Please give your inputs, awaiting for the guidance.

From India, Mumbai

Assistant Engineer, Indian Telephone Industries, Palakkad
Dear Smruti,
You are correct. Under the Payment of Gratuity Act, it is an additional benefit/statutory claim for employees. The quantum of Gratuity can be computed only on completion/ stoppage of service.

From India, Bangalore
Raj Kumar Hansdah

Yes, I agree with the views expressed.
Gratuity is a contingent payment, payable on separation.
The practice adopted by MNCs - to show it on CTC at the time of joining or to deduct an amount every month; is absolutely incorrect.
It shows that MNC's do not understand or comply with the Indian standards/practice; or they have hired HR's who are either incompetent or lack the conviction and courage to explain the ground realities to their masters.
Warm regards.

From India, Delhi
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