Gratuity for Retired Employees: Are You Eligible After 10 Years in a New Job?

Hi,

Is a retired employee eligible for gratuity if he joins a company at the age of 61 (after full-time employment and retirement from the government sector) and continues over 10 years of service in direct employment in the same company? The company does not have any gratuity fund under LIC.

Once retired, you lose the right to claim gratuity after 58 years of age. However, it is purely a management option to grant you gratuity for service after your retirement.

After retirement, certainly, some companies may seek the services of retired employees for various reasons. The payment could be in the form of fees, honorarium, consultancy procedures, consolidated amounts, etc. Some organizations deduct income tax accordingly. In your case, it is advisable to claim the amount without mentioning gratuity. Additionally, please verify that you are not considered a regular employee. If they have classified you as a regular employee, you have the right to receive all the benefits of regular employment for these ten years. There is no legal interference in these services.

Best of luck.

As per the Gratuity Act, it is immaterial whether the employee is retired and reemployed or not. All that matters is whether the Act is applicable to the employer and whether the employee has completed five years of service. Another point is, if the employee has received ten lakh rupees as gratuity from his previous company under the Payment of Gratuity Act 1972, the gratuity he receives from the next company will be taxable.

Varghese Mathew Freelance Consultant 0471 2542059