Understanding Gratuity: Who Qualifies and How Is It Calculated?

Questions on Gratuity

Can anyone help me with the following questions on Gratuity?

1. Is there any salary slab for those who are eligible for Gratuity, or are all employees who have completed 5 years eligible?
2. Is there any cutoff amount for Basic and DA in calculating Gratuity?

In my opinion, there is no specific mention of a slab for employees to receive gratuity from the employer. Every employee is entitled to receive gratuity from the employer, regardless of the slab, salary, or wage per month. The Payment of Gratuity Act, 1972, does not have any provision on a cut-off amount for Basic and DA when calculating gratuity.

Regards,
R.N.Khola

According to the current regulations, there is no salary ceiling for Gratuity. The ceiling of ₹10,00,000 applies to the total amount, specifically for statutory claims and income tax exemption. According to Section 4(5) of the Payment of Gratuity Act, the employer can pay in excess of the ceiling limit.

Regards,
Abbas.P.S

No salary limit for eligibility. However, the eligible maximum is limited to INR 10,00,000.

Regards,
Vijayarajan.

The above limit of Rs. 10,00,000 is for statutory claims only, i.e., the employee is entitled to a statutory claim of up to Rs. 10,00,000. However, as I mentioned earlier, Section 4(5) of the Payment of Gratuity Act, 1972 stipulates that the employer can pay in excess of Rs. 10,00,000.

Abbas.P.S