Hello Everyone,
I trust you all are in good health.
I joined my current company in September 2017, and I'm presently in my notice period. I have an unresolved loan for which my employer is requesting me to sign a bond and provide a Post-Dated Check (PDC). However, my approach is to lessen or settle the loan amount by asking for my gratuity, as I have served for 8 years in this company. I am aware that gratuity is calculated based on the last Basic+DA, but I am uncertain about the DA and the components taken into consideration for its calculation.
The salary breakup at my current company is as follows:
Basic: 40%, HRA: 20%, Education Allowance: 10%, Leave Travel Allowance (LTA): 20%, Special Allowance: 10%.
I would greatly appreciate your useful insights on which of the above components will be factored into the gratuity calculation.
Thank you.
From India, Mumbai
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I trust you all are in good health.
I joined my current company in September 2017, and I'm presently in my notice period. I have an unresolved loan for which my employer is requesting me to sign a bond and provide a Post-Dated Check (PDC). However, my approach is to lessen or settle the loan amount by asking for my gratuity, as I have served for 8 years in this company. I am aware that gratuity is calculated based on the last Basic+DA, but I am uncertain about the DA and the components taken into consideration for its calculation.
The salary breakup at my current company is as follows:
Basic: 40%, HRA: 20%, Education Allowance: 10%, Leave Travel Allowance (LTA): 20%, Special Allowance: 10%.
I would greatly appreciate your useful insights on which of the above components will be factored into the gratuity calculation.
Thank you.
From India, Mumbai
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Hello,
In India, the calculation of gratuity is governed by the Payment of Gratuity Act, 1972. According to this Act, gratuity is calculated on the basis of the last drawn salary, which includes Basic Salary and Dearness Allowance (DA). Other allowances like HRA, Education Allowance, Leave Travel Allowance (LTA), and Special Allowance are not considered for the calculation of gratuity.
The formula for gratuity calculation is as follows:
Gratuity = (Basic Salary + DA) x 15/26 x Number of years of service
Given that you have served for 8 years, your gratuity would be calculated based on your Basic Salary and any DA you might be receiving. If you do not receive a DA, only the Basic Salary will be considered.
As for your loan, it's crucial to understand that your employer cannot force you to sign a bond or provide a PDC against your will. It would be advisable to consult with a legal expert or your HR department to understand your rights and obligations better in this regard.
Remember, gratuity is a statutory right of an employee who has served for five years or more in the same organization, and it cannot be withheld for the repayment of any loans unless there is a court order to that effect.
I hope this helps!
From India, Gurugram
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112In India, the calculation of gratuity is governed by the Payment of Gratuity Act, 1972. According to this Act, gratuity is calculated on the basis of the last drawn salary, which includes Basic Salary and Dearness Allowance (DA). Other allowances like HRA, Education Allowance, Leave Travel Allowance (LTA), and Special Allowance are not considered for the calculation of gratuity.
The formula for gratuity calculation is as follows:
Gratuity = (Basic Salary + DA) x 15/26 x Number of years of service
Given that you have served for 8 years, your gratuity would be calculated based on your Basic Salary and any DA you might be receiving. If you do not receive a DA, only the Basic Salary will be considered.
As for your loan, it's crucial to understand that your employer cannot force you to sign a bond or provide a PDC against your will. It would be advisable to consult with a legal expert or your HR department to understand your rights and obligations better in this regard.
Remember, gratuity is a statutory right of an employee who has served for five years or more in the same organization, and it cannot be withheld for the repayment of any loans unless there is a court order to that effect.
I hope this helps!
From India, Gurugram
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Gratuity calculation.doc
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Dheeraj4368925
Thank you so much!!