How Do I Register Gratuity for My New Company Without a Consultant's Help?

Understanding the Process of Gratuity Registration

Can anyone please help me to understand the process of Gratuity registration from the employer's side? My company is new, and I need to initiate the process without any consultants' help.

Regards,
Gajraj Singh

There is no registration for gratuity, but it takes place automatically by operation of the Payment of Gratuity Act. The Act requires that an employee leaving the organization after serving the company for a continuous period of five years is to be paid gratuity. At the same time, in the case of death, the dependent of the deceased employee is to be paid gratuity for which the qualifying service of five years is not required. In order to know who is the dependent who is legally entitled to get gratuity, an employer is required to collect nominations in Form F from all employees who have completed one year of service. In fact, with that, the process of the application of the Payment of Gratuity Act starts.

Gratuity is calculated on the amount of salary paid to the employee at the time of his leaving the company, and the amount of gratuity is equal to 15 days' salary for every completed year of service, subject to a maximum of Rs 10 lakhs.

Regards,
Madhu.T.K

Understanding Gratuity Applicability

As per the Gratuity Act of 1972, there is no registration required for gratuity, but it becomes applicable after 5 years of service. The calculation formula for gratuity is: current basic/26*15*years of service.

Thanks & Regards,
Vikas Sharma

There is no requirement to get registration for Gratuity, but some companies opt for the Gratuity Scheme of insurance companies like LIC. These insurance companies pay interest on the amount paid to them as Gratuity Premium. For this purpose, you are required to have an agreement with LIC. Provide the data like the name of employees, their age, their basic salary, nominees, etc. Insurance companies decide the premium amount based on the employee's basic salary.

Regards,
Rajiv Singh

Intimation of Applicability for Gratuity Act

The company has to fill Form A for an intimation of the applicability of the Payment of Gratuity Act to the concern's Controlling Authority [Rule 4(a)].

Thank you for the information. Could you please assist me by explaining the following:

Gratuity Calculation Details

- Basic salary (at the time of leaving the job): Rs. 9600/-
- Total period worked: 7 years

How much gratuity will I receive?

Please reply. Thank you in advance.

Regards,
Nisar
[Email Removed For Privacy Reasons]

You don't require registration. The best thing for you is to form a trust through LIC and get it administered by them. No hassles, and the procedure is simple. The entire documentation of the trust is done by LIC. The service is at your doorstep. What you have to do is pay the premium based on the number of employees, Basic+DA, date of birth, etc., according to the actuarial calculations of LIC. Besides, it provides insurance coverage if any employees die. When an employee leaves or retires, communicate with LIC with details in their format, and you will receive the cheque within 2 weeks.

For details, you can contact the LIC Regional Office at your place directly. The procedure is simple. For further clarification, you can get in touch with me.

Regards,
S. Nagasubramanian
Senior Manager, Legal, PR & EOHS
RSB TRANSMISSIONS (I) LTD, PUNE.
Mobile: [Phone Number Removed For Privacy Reasons]
Email: [Email Removed For Privacy Reasons]

Submission of Form - A for Gratuity Act Compliance

The company has to submit Form - A [See Rule 3(1)], Notice of Opening, for the applicability of the Payment of Gratuity Act to the concerned Controlling Authority.

Additionally, the following abstracts and notices need to be displayed on the company notice board in both English and the vernacular language:

1. Notice of Authorised Person under the Payment of Gratuity Act, 1972
2. Abstract - Form U under the Payment of Gratuity Act, 1972

Regards,
Jeeva K.
[Phone Number Removed For Privacy Reasons]

There is no provision for such registration. However, we need to understand both the point of view of the employee and the employer. From the employee's perspective, we know it is a long service award. But from the employer's standpoint, it is a contingent liability that needs to be paid to the employee in a crisis or at the end of the term.

Generally, after completing 5 years from the inception of the business, it is a statutory obligation for the employer to make a provision for the Gratuity Fund, which they have to manage themselves by creating a trust or by approaching LIC of India. I am attaching the scheme issued and administered by LIC of India for further clarifications.

Regards

Dear Vijaysinh,

Welcome to CiteHR. Forms are provided by the Payment of Gratuity Rules; therefore, first see which State/Central Rules are applicable in your case and then go through those Rules to have formats as provided therein for your query.

R.N.KHOLA

Please let me know about the applicability of gratuity for assistant teachers in private primary schools (recognized/unaided).

Hi All, I am very glad that you all took the time to respond to my question regarding Gratuity Registration. I now understand the procedure, which I find simple and easy to comprehend. I appreciate all of your valuable replies.

Thanks & Regards,
Gajraj Singh

Hi Madhu, I am very much glad that you spared time on my question regarding Gratuity Registration. I completely understand the procedure now and feel it is simple and easy to comprehend. I admire all of you for your valuable reply.

Thanks & Regards,
Gajraj Singh

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Andhra Pradesh State Government Notification on Compulsory Gratuity Insurance

The Andhra Pradesh state government notification on compulsory gratuity insurance is attached herewith for your perusal.

Regards,
Ramakrishna

[Phone Number Removed For Privacy Reasons]

Thank you for the attachment. I think this is the first government that has made these rules.

Regards,
R.N.KHOLA

Process for Filling the Gratuity Form

What is the process for filling the Gratuity Form? Please provide details on which form is required as per the Act. I am from Gujarat.

Thank you,

Vijaysinh Vaghela

Understanding Gratuity Form Requirements

The requirement of the form is to be decided by you. Please go through the Gujarat Payment of Gratuity Rules to understand the various forms.

Regards,
R.N.Khola

Though there is no requirement for registration for newly opening establishments, when it becomes entitled (i.e., when there are 10 employees), the notice of opening is required to be sent to the authority in Form A within 30 days of the opening of the establishment.

I hope that I am able to shed light on this query.

Regards,
MG

[Phone Number Removed For Privacy Reasons] Kolkata

Dear Senior Member, I am working at ITCOL company, which is a three-year-old organization. I joined six months ago, and now the auditor is inquiring about the gratuity registration. The question is as follows:

Registration for Gratuity

Registration for gratuity has not been obtained as required under The Payment of Gratuity (Central) Rules, 1972 under section 3 as reproduced below: Notice of opening, change, or closure of the establishment.- (1) Within thirty days of the rules becoming applicable to an establishment, a notice in Form A shall be submitted by the employer to the controlling authority of the area.

So please tell me, is it mandatory to take registration? Secondly, if it is mandatory, what is the procedure for taking registration after three years?

Regards, Amit

Dear Amit, after going through your query, it is submitted that we are not required to apply for any registration. We are required to submit Form 'A' to the area Controlling Authority under The Payment of Gratuity Act, 1972, within 30 days of the Rules becoming applicable to the establishment. In your case, your establishment has not submitted this intimation so far, but this does not mean that if you failed to send the intimation in time, i.e., 30 days, you should not rectify the irregularity and allow it to continue. Send the intimation immediately to avoid the continuance of the offense. First, decide your appropriate government and then send the intimation to the concerned Controlling Authority.

R.N.KHOLA

There is no provision for such registration. However, we need to understand the perspectives of both the employee and the employer. From the employee's point of view, it is a long-service award. From the employer's point of view, it is a contingent liability that needs to be paid to the employee in times of crisis or at the end of the term.

Gratuity Fund Obligations

Generally, after five years from the inception of the business, it is a statutory obligation for the employer to make provisions for the Gratuity Fund. They have to manage this themselves by establishing a trust or they can approach LIC of India for assistance. I am attaching the scheme issued and administered by LIC of India for further clarification.

Is it compulsory to create a trust for this purpose, or can we have this policy from LIC without a trust?