Gratuity Eligibility and Calculation

As per the basic Act, one who has even one day short to complete 5 years is not eligible for gratuity. The matter of 240 days is taken only to decide continuous service. As such one who had 240 days of work (inclussive of leave due to employment injury, CL, ML, lay off etc) in a year shall be treated as having continuous service. This is to protect such employees who may not be regularised by the employer to deter so many rights in the law. There is also some misconception that only confirmed employees are eligible for gratuity, EPF etc. That's why a provision has been made to interpret 'continuous service' by reading 240 days of service. But this is not applicable to death cases, where as one member asked, one who dies the very next day of his service will get gratuity; but the amount of gratuity will be to that extend only.
However, there are court verdicts (Madras HC and Delhi HC) allowing gratuity to employees who have not completed 5 years of service but on the basis of their 240 days of service in the fifth year.

Regards,

Madhu.T.K

Dear Mr.Madhu,
Its a clear and informative info.
But I find in this forum, THE LATEST POST APPEARS AT THE LAST PAGE (PLS CHECK IT FOLLOWS AN ASCENDING DATE ORDER)
It would be better if the latest post appear on the top (descending date order)
Request you to pls check if something could be done on this.
-Saravana Rajan

I had also experienced the same case where Company didnt pay the Gratuity to the employee left the org after 4 yrs 10 months of regular service. I personally not convinced with this, since its was only 2months to go to compleate the 5 yrs.
Can somebody advice if he can go back and ask his Gratuity from the previous employer? Its a recent incident.

Dear..
Can someone also please clarify on the Gratuity ceiling of Rs 350000/-. One of our employee has completed 8 years in the organisation. His gratuity figure is much higher than 350000/-. As per the law Company has an option to pay either 350000/- or the total amount. Seniors please let me know if my understanding is wrong
Warm Regards
Smita

Gratuity Maximum limit that Employer will pay Rs.350000 as per the act. if the employee gratuity payable exceeds this limit, we may restrcit up 350000/- we need not pay total amount.
Raghu

Hi,
You can tk a look at the foll URL. Hope it'll be of sm help
Calculate Gratuity
Warm Regards
Moumita

Gratuity Calculation
Basic + DA (Last drawn) X 15 / 26 X No of years of service.
-Saravana Rajan

maximum period of service to be eligible for gratuity is 5 years.. companies have the liberty to pay gratuity for lesser years of service also 2/3 years.. this however, has to be explicitly stated..

Hi ,
I am working in IT firm and after completing my 6 year of service I have been transfered to US office head office on L1 visa. Here I have been joined as a new employee no connection or link/benefit etc. releated to India office.
I want to know whether i am eligble for Gratuity fund or not.
Regards,
RS

If your transfer to US Office is not in continuation of your service in India, your services in India are supposed to have been terminated. As such you are eligible for Gratuity. On the other hand, if your posting is only a temporary arrangement with a condition that you will be posted back in India, it will be presumed that you are still in service. Therefore, study the transfer order in detail and act accordingly.
Regards,
Madhu.T.K