Reg:Gratuity

Hi Seniors,
My company detects some amount in the CTC month wise as a percentage of Gratuity( 5% of Basic) and they will provide this once an employee completes 5 yrs, my question is that is it right that a company detecting amount for Gratuity in his own CTC and giving it as after 5 yrs.
Tell me exactly what is the source for gratuity for the employee.
Thanks
Senthil

Hi,
1.Gratuity is payable only when an employee completes 5 years of continuous service. If an employee leaves company before 5 years then employee is not eligible for gratuity irrespective whether same was part of employee CTC or not.

I can understand that, what if the employee has not completed his 5 yrs and his gratuity is not given in the Fand F settlement

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Hi Senthil,
You have a point, but unfortunately gratuity becomes payable only when an employee completes 5 yrs.of continuous service with the one and the same employer. And anything falls short nothing gets paid. But since a portion of your CTC includes gratuity part also and the CTC is a package remuneration p.m. it may be reasonable to claim it when you leave before completion of 5 yrs. I think somebody who leaves thus should claim it and see what happens.