Gratuity Payout Capping
In the payout of gratuity, is there a capping for the maximum amount that can be paid by the employer? For example, my company has defined gratuity as follows: "Gratuity is calculated at the rate of 15/26th of every month's basic salary for every completed year of service or part thereof in excess of six months, subject to a maximum of Rs. 1,000,000." Please let me know whether the capping of Rs. 10 Lakhs is correct and whether we actually have any capping or not, as per the Gratuity Act.
Regards, Chandrashekhar.
In the payout of gratuity, is there a capping for the maximum amount that can be paid by the employer? For example, my company has defined gratuity as follows: "Gratuity is calculated at the rate of 15/26th of every month's basic salary for every completed year of service or part thereof in excess of six months, subject to a maximum of Rs. 1,000,000." Please let me know whether the capping of Rs. 10 Lakhs is correct and whether we actually have any capping or not, as per the Gratuity Act.
Regards, Chandrashekhar.