Understanding Gratuity and Provident Fund (PF)
Gratuity and PF are not related to each other.
Provident Fund (PF)
PF is a statutory contribution for employees and employers covered under the Act. An employer is covered under the act when they have 20 or more employees on their payroll and then continues to be covered under the act even if, at a particular time, the employment strength falls below 20.
An employee is covered under the act if their starting basic salary was less than or equal to 6,500. They continue to be covered under the act even if their basic salary increases above 6,500 or if they change jobs and the new employer is covered under the PF act.
Read more on PF:
http://epfindia.gov.in <link updated to site home>
Gratuity
However, gratuity is a special bonus given to employees as a reward for their long-term service. A minimum of 5 years of service is required to be eligible to claim gratuity. Gratuity can be claimed only once - either on retirement, resignation, termination, or death.
Only in cases of death, resignation, or termination due to partial or full disability where the person is incapable of performing the task, the gratuity is paid to the employee or their nominee/legal heirs (as the case may be), and an exception of a minimum period of 5 years is discarded in these cases.
Read more on Gratuity:
http://www.mahashramm.gov.in/maha/ac...y_Act_1972.pdf