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.
Regds,
Smruti
From India, Mumbai
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.
Regds,
Smruti
From India, Mumbai
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+1 Other
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.
Abbas.P.S
From India, Bangalore
517You 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.
Abbas.P.S
From India, Bangalore
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
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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Advance can be deducted from gratuity if agreed by employee - Kolkatta HC 29.11.2012.pdf
Gratuity Form I.doc