Madhu.T.K
Industrial Relations And Labour Laws
Vmlakshminarayanan
Sr.manager - Hr&admin

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I have a question to help my friend.Please if anyone can help. If his basic salary is INR 11750 and he have worked for a company for 7 yrs and 8 months and have resigned from the company on 21st November then what will be his Gratuity amount payable.
The company where he has worked for has computed his basic INR 8225/- based on 21 days on November 2019 after which he resigned and calculated the last drawn basic for gratuity payment.
Now my question is the last drawn basic on which the gratuity calculation is to be made will be Rs.11750/- or Rs. 8225/-?

I have a question to help my friend.Please if anyone can help.If his basic salary is INR 11750 and he have worked for a company for 7 yrs and 8 months and have resigned from the company on 21st November then what will be his Gratuity amount payable.
The company where he has worked for has computed his basic INR 8225/- based on 21 days on November 2019 after which he resigned and calculated the last drawn basic for gratuity payment.
Now my question is the last drawn basic on which the gratuity calculation is to be made will be Rs.11750/- or Rs. 8225/-?

The Basic Salary for Gratuity calculation is Rs. 11,750/- and not Rs. 8225/-. The Act states Last Drawn Salary and not Last Earned Salary
Hi,
Actual last drawn basic +DA salary to be considered for Gratuity calculation which is Rs.11750 as per your statement. Your friends Gratuity eligibility will be Rs.54231/-. total. 7.8 years to be rounded off to 8 years for calculation purpose.

In my opinion, it is not only the last drawn basic salary, ie, Rs 11750 in the given case, but the entire salary including allowances which are payable as per contract of employment that should be considered for calculating gratuity. This is because the salary for the purpose of payment of gratuity means the total amount payable to an employee as per the contract of employment and not just on the basic salary. Please follow the link also.
Madhu T K: Payment of Gratuity and Gratuity Qualifying Salary

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