Additional Detail:
If any Employer is intentionally delaying payment of gratuity beyond 30 days, the staff can file a petition to the Commissioner of Labour (Payment of Gratuity) in the prescribed form (Form 10N) and the Government will follow up with the Employer and ensure that the amount is paid.

From India, Chennai
Yes Dear. As some other Gentleman has said, the Organization is liable to pay his eligible Gratuity even if he is caught in a legal/criminal case. However, if the Organization has initiated any legal/criminal case against him for fraudulent activities, he will not be eligible if it is proved.
Selvaraj Ponnuswamy.

From India, Coimbatore
Mr Umakanthan aptly clarified 1) The payment of of Gratuity 2) Not connected to CTC. Please read the same.
From India, Nellore
Dear HR567

The Payment of Gratuity Act 1972 is a Social Security Act and applies to every shop or establishment within the meaning of law for the time being in force in a State in which 10 or more persons are employed or were employed on any day of the preceding 12 months.

Gratuity is Social Security right of an employee which shall be payable to an employee on termination of his employment after he has rendered continuous service for not less than four years or and 240 days, before in case of death of employee while in employment with the company.

Gratuity is Social Security Obligation of an Employer towards his employee and is legally bound to pay the same to his employees under Sec 4 The Payment of Gratuity Act 1972.

As per Accounting Standard (AS) 15 (revised) every company is required to make provisions towards gratuity by way of independent actuarial valuation and provide for accrued liability in respect of long term employee benefits.

As per Section 209 Companies Act 1956 every company is required to maintain books of account reflecting clear, true and fair view of transactions mentioned under section 209 (1) a to d.

Being a law abiding Company it is imperative for companies that they oblige and adhere to mandatory compliance under Accounting Standard (AS) 15 (revised- 2005 ) read along with Sec 209 of Companies Act at all times.

Coming back to CTC query raised by you

Cost To Company means any cost that company bears (whether statutory or otherwise) on employment of any employee in to the company. If you read the above explanation you will understand that Company has to make provision towards Gratuity and that is a Cost To Company and taking or calculating Gratuity as a component of CTC is justified.



From India, Mumbai
Dear what is told is that CTC, of course cost to the company. But there is no recovery from the employee towards gratuity. It need not be shown on the pay slip of the employee.
From India, Nellore
Dear Seema,
FYI as per the Payment of gratuity act 1972 ,the act state about the provision of processing the gratuity to all on roll employees Enrollment of PF / ESIC act doesn't have any coinciding point.
There is no relation between estblishment/factory registration under PF/esic and making provision for Gratuity to its employees.
Moreover on the issue of POG Act 1972 it shouldn't be included as a part of CTC bcoz it will be taxable as income on salary .
Moreover its paid to the Employees after the minimum continuous employment of 5 years in the respective company/ organization.

From India, Indore
Dear seniors
I have a query as the salary register is maintained to prove that the company has distributed this amount as salary and wages. Ad the bonus is paid through bonus form c register. How the gratuity amount is paid. What is the register to prove that co. Has given this and this amount as gratuity. In which register gratuity payment is mentioned.

From India, New Delhi
Dear Mr.Dinesh,
A separate register should be maintained for payment of gratuity. Apart from this,the gratuity settlement sheet of each staff should be separately maintained.This sheet will have the workings for the gratuity amount and the stamped receipt from the staff.

From India, Chennai
Mr.Umaranthan has aptly replied the provisions as existing in the Gratuity Act 1972.
It is a welfare legislation - to reward an employee for his long unblemished service in an establishment. I feel small establishments, in order to meet the future payment of gratuity can create a fund by depositing actuarial value of the work force reuglarly.

From India, Bangalore
In my company gratuity is part of CTC and it is being deducted from my monthly salary. Is it right as per law? What if I dont want to work for 5 years.
From India, Delhi

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