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dhinu-mk
I have joined in a company and they are deducting gratuity from my CTC but I am not going to work in this organization for 5 years. Is there any chance I can get back the amount that has been deducted from my salary when I relive from this organization? Please suggest any Act so that I can question my company.
From India, Bengaluru
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Vmlakshminarayanan
Agm - Hr&admin
Nanu1953
Ceo-usd Hr Solutions
Pvenu1953@gmail.com
Retired Government Servant/advocate
Abhishek-dhingra1
Labour Law Advisor And Hr Consultant

vmlakshminarayanan
919

Hi,

Gratuity is a monetary amount payable to the employee of an organisation under the Payment of Gratuity Act 1972 ( Subject to completion of continuous 5 years service with the Employer) .

Employer is not supposed to deduct Gratuity from your salary and pay you Gratuity. As per my assumption your Company should have some tie up with some Insurance companies towards Group Gratuity Scheme for which Company use to pay premium. What ever premium paid by the employer for you might be shown in CTC as over all cost incurred by the employer for you.

If the Gratuity amount is deducted from Gross salary then you have right to claim back. But insurance premium paid by the employer and shown in the CTC you cannot claim back. If you complete 5 years then employer will pay you the Gratuity.

From India, Madras
dhinu-mk
Hi Thanks for your Point but I don’t think so my company is paying any insurance premium so is there any act I can point out and get back my deducted gratuity amount?
From India, Bengaluru
vmlakshminarayanan
919

Hi,

Whether your Employer is making the payment to insurance company or not once you become eligible for Gratuity ( after continuous service period of 5 years , after relieving ) your Employer is liable to pay you the Gratuity at any cost either on their own or through insurance Company. You cannot claim for the monthly premium which is shown in your CTC. Gratuity alone you can claims as a matter of right once become eligible.

From India, Madras
pvenu1953@gmail.com
125

CTC is the expenditure or the amount that the employer spends for the employer and is a much more broader concept than 'pay' or 'salary' as legally defined in terms of the extant norms as in force in country. The amount shown as 'cost' towards gratuity (as and when payable or if at all payable) does not amount to a deduction, as legally understood.
From India, Kochi
nanu1953
334

This is the issue when Pay roll is processed from CTC. In CTC everything is included (gratuity also ) . Therefore in earning side at CTC Gratuity is appearing and in deduction side it is deducted as it is not payable with monthly salary.

Whether Gratuity is paid by Insurance or by the Company , it has nothing to do.

Payment of gratuity will be as per PG Act i.e 5 years continuous service.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
abhishek-dhingra1
12

Yes, this is the main concern these days the companies who do not care for there employees neither motivate them and treat employees as a liability, they usually follow this trend.

These companies at the time of joining the employees shows them the higher CTC but as the employee is not much knowledgeable in the area thinks that the CTC is good but he does not know Gratuity is payable as per the Gratuity Act (after 5 years).

So, in most of the cases if the employee thinks that this has happened with him and feels cheated, the employee usually approaches to the court for Recovery of Money case and usually company do settlements on these cases.

But, yes the respective Labour Departments should give the guidelines to the organisations in this area.

Hence, if you think you have nothing to do with the company that you have left you can file a recovery suit against the directors of the company and do not approach to the respective Labour Department.

From India, New Delhi
PRABHAT RANJAN MOHANTY
581

The gratuity is only payable to an employee on his exit from the services, if has completed 5 years of continuous service.
You are not eligible for gratuity, if your services is less than five years. The CTC is something else, which is nothing but cost to the company for making provisions in account.
Please note that, you can claim for gratuity on your exit from the company prior completion of 5years service, provided you contributed from your wages monthly on A/c of gratuity. Check your pay slip, whether any deduction happened in deduction column(Basic+DA+ other Allowances) - (EPF+ESI+other statutory deductions) =Net salary

From India, Mumbai
nanu1953
334

Further to my earlier post and the query raised by the original post, it appears to me that Pay roll from CTC (monthly) is a confusing as shown below:-

Basic-10,000. HRA- 4000, OTHER ALLOWANCES -6000, Employer Contribution to PF - 1800, Employer contribution to ESI - 650, Gratuity - 480, Statutory Bonus - 1000. CTC - 23,930.

Now while processing pay roll in earning side all above are shown but in deduction side it is shown - Employer portion of PF, Employees portion of PF, Employer portion of ESI, Employees portion of ESI, Gratuity, Bonus and PTAX if any. Net salary is Gross earning - gross deduction.

It appears that Gratuity has been deducted from Employee's salary but actually it is not.

Therefore, to my opinion pay roll should be processed from Monthly Gross salary which should be in this case Basic, HRA & Other allowances = 20,000/- per month and the deduction

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
nanu1953
334

............. (last line ) and the deduction will be Employee's portion of PF & ESI, PTAX if any.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
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