Is Gratuity for Teachers Based on Gross Salary or Basic + DA? Seeking Clarity and Official Notification

Dear Members,

I came to know that gratuity is applicable to educational institutions. I would like to know from when it is covered and where I can get a copy of the notification to this effect.

Secondly, my PF consultant says gratuity has to be calculated on the gross salary (except conveyance) but my understanding is it is calculated on basic + DA.

I request members to respond and give me correct inputs.

Regards,
Bhavan

Dear Bhavan, As per Notification No. S.O. 1080 dated 03-04-1997 of the Central Govt., under section 1(3)(c) of the Payment of Gratuity Act, 1972, educational institutions employing 10 or more employees have been specified as a class of establishments to which the Act shall apply with effect from the same date. You can find this information in the latest edition of the Act books.

Since the Act is applicable to such educational institutions starting from 03-04-1997, employees who were on the rolls on that date and retire or resign thereafter are entitled to gratuity under the Act regardless of their date of appointment, provided they meet the eligibility criteria.

Your viewpoint that only the sum total of the last-drawn monthly basic pay and D.A. needs to be taken into account for the calculation of gratuity is correct.