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There is no provision in the Payment of Gratuity Act to make the deduction for any absence which has been regularised. Regularised absence is part of continuous service as Section 2A of the Act. This deduction is illegal and you shall protest against such a decision. If they persist then a formal protest letter could be issued. This decision will not stand the test of law and if all persuasions fail, you may approach the Local Labour Office and lodge your complaint.