Gratuity [Thread 38294]

Request if somebody can inform if Gratuity is compulsory for IT industry or not.

Dear Friend,
It should be covered. But minimum applicabelit start when the employee completed his/her Five years of service.
Regards,
PBS KUMAR

Hello,
Its should be there according to act just like that PF and ESI.
Because its all for employee benfits.
Regards
Shanti

Hi Shanti,
These acts are for employee benefits and give them more privilege.
All acts are appliable where 20 or more employees are working.
Regards
John

Kindly click on the following link, it will give you some required information,
https://www.citehr.com/search_new.ph...uity&submit=Go

Hi,
As per law one is entiltled for gratutiy when he complete 5 years of sevice if PF & ESI is covered.
uma

Hi,
Its a statutory obligation of an employer to his employee. Eventhough its paid out only if the employee parts ways after 5 continuous years of service, a liability will have to be captured in your book of accounts as per actuarial calculation.
Shoba

Dear All,
As per the scope of the Gratuity Act - 1972, every factory and Shop or establishment employing 10 person shall be covered under the Act.
As for as IT companies are concerned, these are covered under shop and establishment Act of concerned state and normally employing 10 employees shall be covered under the Gratuity Act.
The payment of gratuity is governed by the act as one has rendered 5 years completed years of service shall be eligible for payment of gratuity.
and it will be calculated as,
15 days average (divided by 26) last drawn basic wages (Basic+DA) for every completed year of service.
Gratuity = [{(Basic+DA)/26}*15] * completed years of service.
Hope it will clarify the subject matter.
further you can write for more particular case.
Mohd. Arif Khan

Hi,
Most of our colleagues have written about the Gratuity Act applicable to industries and shops & establishments in India. This act has a limit of a maximum amount that can be paid. Earler it was Rs 3,50,000.- The limit may have been raised.
Most multinationals do not pay gratuity. They offer something similar called superannuation or severance which offers one months salary for each year of completed service. Income tax is applicable as per law.
Cheerio
Rashmi

Dear Arif,
Do you mean that less than 10 members Gratuity is eligible than do you say that PF and ESI is not necessary.
Uma