Worked for 1st June 2015 to 3rd Jan 2020 - I am eligible for gratuity? - CiteHR
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Asso.prof.(commerce & Management) Pg
R.N.Khola
Labour Laws & Ir
Krupal Patel
Hr Executive
Suresh2511
Labour Consultant

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Dear team, I have worked for 1st June 2015 to 3rd Jan 2020 in organization 5 days week. Whether I am eligible for gratuity?
If your employer is covered under the Payment of Gratuity Act, 1972 then of course you are entitled to have gratuity amount from your employer.
R N KHOLA

You are not eligible as per as Payment of Gratuity act. You must complete 5 year service of dated of the join.
Gratuity is a benefit received by an employee for services rendered to an organisation. For companies covered under the Gratuity Act, this benefit is paid when an employee completes five or more years of service with the employer. An employee gets gratuity when he/she resigns, retires or is laid off. In case of death or disablement there is no minimum eligibility period.
How Gratuity is Calculated
The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26.
According to this formula, the time period of over six months or more is considered as one year.
This means if you have completed five years and seven months of service, the number of years would be considered as six years for calculation of gratuity benefit.
On the other hand, if the service period is five years and five months, for gratuity calculation it will be considered five years.
An employer can, however, give higher gratuity than the amount under the prescribed formula.
Maximum Amount
For government employees, Rs. 20 lakh is the maximum amount that can be paid as gratuity. The Seventh Pay Commission had recommended an increase in the gratuity ceiling to Rs. 20 lakh from the earlier level of Rs. 10 lakh.
Income Tax Treatment of Gratuity
For government employees, the entire amount of gratuity received on retirement or death is currently exempted from income tax.
In the case of non-government employees, income tax rules on gratuity are applicable depending on whether employees are covered under the Payment of Gratuity Act, 1972 or not.
For non-government employees covered under the Gratuity Act, the income tax exemption on any gratuity received is least of the following:
• The maximum amount specified by the government which is currently Rs. 10 lakh
• Last drawn salary X 15/26 X years of service
• Actual gratuity received
For example, the last drawn salary (basic plus DA) of Mr. Ashish, for example, is Rs. 60,000 (per month) and he has worked for 25 years. The gratuity according to the formula is Rs. 8.65 lakh but suppose he has actually received a gratuity of Rs. 12 lakh.
So for income tax calculation, Rs. 8.65 lakh will be considered for exemption. So Mr. Ashish will pay tax on Rs. 3.35 lakh (Rs. 12 lakh – 8.65 lakh).

Dear Anamik,
First of all your sentence is wrong. How come you said that you have worked for the period from 1st June, 2015 to 3rd January, 2020, when we are in December, 2019.
Strictly speaking you are not eligible for Gratuity as per the provisions of Payment of Gratuity Act 1972 as you have not completed 5 years of continuous service.
Some Courts have given judgments to pay gratuity when the employee put continuous services of 4 yrs. 180 days and 4 yrs. 240 days for working 5 day week and 6 day week respectively. But that is in individual capacity. The Act is not amended yet.
In your case the above is not applicable as you are not meeting the above criteria.
Regards,
Suresh

Lots of discussion have taken place in this forum during last few years, why don't you search and read those pages for immediate clarification on this issue pl.?
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