Hi All,
I need clarification on the payment of Gratuity. If an employee's gratuity amount exceeds 10 lakhs, then what amount should be paid to the employee as the maximum gratuity amount should not exceed 10 lakhs according to the Gratuity Act - Amendment 2010. Kindly suggest.
Regards, Shilpa
From India, Hyderabad
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I need clarification on the payment of Gratuity. If an employee's gratuity amount exceeds 10 lakhs, then what amount should be paid to the employee as the maximum gratuity amount should not exceed 10 lakhs according to the Gratuity Act - Amendment 2010. Kindly suggest.
Regards, Shilpa
From India, Hyderabad
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Hi Shilpa, If Gratuity excedes as per Getuity Act set by the govt, no need to pay. if the management want to pay means we can pay by other names like incentives,attendance bounes etec
From India, Madras
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From India, Madras
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Dear Ms.Shilpa, The maximum Gratuity amount payable Rs 10,00,000/- above which its left to managements discretion. Till Rs.10,00,000 its non taxable and above it is taxable.
From India, Mumbai
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24From India, Mumbai
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Hello the concern all. How to calculate gratuity? What r the rules n regulations for the same? Please suggest. Regards, nakshatram
From India, Pune
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From India, Pune
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Dear Nakshatram,
Please go through section 4 of the Payment of Gratuity Act, 1972 for the calculation of gratuity.
R.N.Khola
(LL&IR)
*Also Senior Vice President, Labour Law Advisers Association, Gurgaon.
www.skylarkassociates.com
Hello, everyone.
How do I calculate gratuity? What are the rules and regulations for the same?
Please suggest.
Regards,
Nakshatram
From India, Delhi
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Please go through section 4 of the Payment of Gratuity Act, 1972 for the calculation of gratuity.
R.N.Khola
(LL&IR)
*Also Senior Vice President, Labour Law Advisers Association, Gurgaon.
www.skylarkassociates.com
Hello, everyone.
How do I calculate gratuity? What are the rules and regulations for the same?
Please suggest.
Regards,
Nakshatram
From India, Delhi
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Dear Nakshatram,
In short, the Act itself is called the Payment of Gratuity Act, 1972. Applicability: Every factory, mine, oil field, plantation, port railway company, shop, establishment, or educational institution employing 10 or more employees. Entitlement is granted upon the completion of five years of continuous service. Wages for calculation (Basic + DA): 15 days' wages for every completed year as if the month comprises 26 days at the last drawn wages.
Calculation:
a) Piece-rated employees: 15 days' wages for every completed year on an average of 3 months' wages.
b) Seasonal employees: 7 days' wages for every completed year of service.
Gratuity = Last drawn salary * 15 * Number of completed years (five and above) / 26. Ceiling Limit: Rs. 10,00,000. For more details, please Google.
From India, Mumbai
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In short, the Act itself is called the Payment of Gratuity Act, 1972. Applicability: Every factory, mine, oil field, plantation, port railway company, shop, establishment, or educational institution employing 10 or more employees. Entitlement is granted upon the completion of five years of continuous service. Wages for calculation (Basic + DA): 15 days' wages for every completed year as if the month comprises 26 days at the last drawn wages.
Calculation:
a) Piece-rated employees: 15 days' wages for every completed year on an average of 3 months' wages.
b) Seasonal employees: 7 days' wages for every completed year of service.
Gratuity = Last drawn salary * 15 * Number of completed years (five and above) / 26. Ceiling Limit: Rs. 10,00,000. For more details, please Google.
From India, Mumbai
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The Payment of Gratuity Act does not restrict the amount to Rs. 10,00,000. The claim to the employee and the income tax exemption is Rs. 10,00,000. However, if management wishes, more than Rs. 10,00,000 can be paid towards gratuity itself.
Abbas.P.S
From India, Bangalore
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Abbas.P.S
From India, Bangalore
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WHAT IS THE ELIGIBILITY IN GRAUITY ACT IF AN Indivisual is registerd employee of a factory for 4 yr and 5 mth and 29 day then is he is eligible for gratuity under the act.
From India, Chandigarh
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From India, Chandigarh
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Dear S P Gupta, Welcome to CiteHR. According to the P G Act, 1972 he is not eligible for gratuity payment. R.N.Khola
From India, Delhi
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From India, Delhi
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Dear Swamiprasad,
The subject matter of this thread is Payment of Gratuity; however, I would like to inform you that we are required to refer to Chapter VIII on annual leave with wages in the Factories Act, 1948, specifically Section 79 to address your query.
R.N.Khola
(LL&IR)
From India, Delhi
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The subject matter of this thread is Payment of Gratuity; however, I would like to inform you that we are required to refer to Chapter VIII on annual leave with wages in the Factories Act, 1948, specifically Section 79 to address your query.
R.N.Khola
(LL&IR)
From India, Delhi
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Dear Mr. Khola,
I have worked in a company for nine years and am receiving a Gratuity of Rs. 3,37,000.00 for nine years of service. The company has accrued Gratuity based on the gross salary of every employee. Could you please advise me if I need to pay Income Tax on this amount or not? This is because we do not have a Basic and DA system for Gratuity. Additionally, for your information, the company is contributing to PF on the higher side for everyone, with a maximum of Rs. 6000.00.
Now, the auditor is suggesting that I need to pay Income Tax on the Gratuity amount as it is on the higher side. I would be grateful if you could provide a response at your earliest convenience.
Thanks in advance.
Kuldip
From India, New Delhi
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I have worked in a company for nine years and am receiving a Gratuity of Rs. 3,37,000.00 for nine years of service. The company has accrued Gratuity based on the gross salary of every employee. Could you please advise me if I need to pay Income Tax on this amount or not? This is because we do not have a Basic and DA system for Gratuity. Additionally, for your information, the company is contributing to PF on the higher side for everyone, with a maximum of Rs. 6000.00.
Now, the auditor is suggesting that I need to pay Income Tax on the Gratuity amount as it is on the higher side. I would be grateful if you could provide a response at your earliest convenience.
Thanks in advance.
Kuldip
From India, New Delhi
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I have worked in a company for nine years and am receiving gratuity amounting to Rs. 3,37,000.00 for the nine years of service. The company has accrued gratuity based on the gross salary for every employee. Could you please advise me on whether I need to pay income tax on this amount? This is because we do not follow the Basic and DA system for gratuity. Additionally, for your information, the company is contributing towards PF on the higher side for everyone, with a maximum of Rs. 6000.00.
I would be grateful if you could respond at your earliest convenience.
Thanks in advance.
Regards,
Kuldip
From India, New Delhi
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I would be grateful if you could respond at your earliest convenience.
Thanks in advance.
Regards,
Kuldip
From India, New Delhi
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Gratuity - Taxation Issues.docx