Understanding Gratuity Claims for a Deceased Employee in a Private Company in India: Can You Help?

Hi all,

Can anyone brief me about the gratuity claim for the death of an employee who was in service for more than 15 years in a private limited company?

Date of Joining: 03-03-2003
Date of Exit: 28-12-2017
Last basic salary: $13,495
Total gross salary: $35,000

Recently, my brother passed away due to a cardiac arrest. He was unmarried. Could you please provide information on the gratuity benefits in terms of the amount?

Regards,
Kumar

Formula:
Gratuity Calculation = [(Basic Pay + DA) x 15 days x No. of years of service] / 26

Approximately, the amount will be 1.25 lakhs. What about DA? If DA was being paid, the Gratuity amount will be higher.

Sad to hear of brother's death. Please contact the firm and meet HR officials.

Gratuity Calculation and Tax Exemption

I am saddened to hear about your brother's death. My deepest condolences to the family.

Gratuity was tax-free up to ₹10 Lakhs. That limit has been raised to ₹20 Lakhs.

How to Calculate Gratuity

The amount of gratuity is directly proportional to the tenure of service and the last drawn salary. Gratuity is given at the rate of 15 days of the last drawn salary for each year of service. The salary considered for the calculation of gratuity includes basic pay and dearness allowance. It is typically calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) multiplied by the number of completed years of service, multiplied by 15/26. According to this formula, a time period of six months or more is considered as one year. For example, if you have completed five years and seven months of service, the number of years considered for the calculation of gratuity benefit would be six years. Conversely, if the service period is five years and five months, the calculation for gratuity will consider five years.

I hope this information is helpful.

Best regards.

Dear Mr. Kumar, I am saddened to hear about the sudden demise of your brother. May his soul rest in peace.

Regarding the payment of gratuity, the due amount based on his last drawn basic salary would be Rs.1,16,784/-. Additionally, he may be eligible for some death benefits if his company is covered under the LIC Group Gratuity Policy and had included additional benefits for death during employment.

He may also be entitled to death benefits under the Deposit Linked Insurance Scheme if he was covered under the Employees' Provident Fund Scheme. The maximum amount he could receive is approximately Rs.5,54,850, calculated as Rs.4,04,850 + Rs.1,50,000/-, with the condition that he was in continuing employment at the time of his passing. The calculation is based on the data provided by you and is subject to variation based on his salary.

Please note that the final amount may vary depending on his attendance and actual salary drawn.

Regards, Suresh

Dear Mr. Kumar,

Legal heirs/nominees as per the Gratuity Nomination Form should submit the claim to the employer. Furthermore, the employer has to deposit the gratuity amount before the controlling authority. It has been almost 3 months. Please do not delay; approach the employer with all the documents.

Gratuity Amount Calculation

Gratuity Amount is calculated as follows:

= 13495 / 26 * 15 * 15 = 116784