Merits and demerits of paying gratuity as a monthly component in salary?

Is paying gratuity as a monthly component in salary instead of lump sum amount at the end of service a possibility as per the law?
What could be the legal implications?

Gratuity is to be paid on end of service or retirement, exit on completion of years of service as laid down by Payment of Gratuity Act.
Why has the thought of monthly payment come up?
Suppose a person exits after 2 years of service?
He is not entitled for gratuity.
Read the original act and then you will understand concept of Gratuity.

I agree with you. I did read the gratuity act, however just wanted to find out the feasibility and consequences of this kind of payout as I am doubtful myself. Wanted to get some advice from this experienced group.

Gratuity is payable only after the service comes to an end. Paying gratuity every month militates against the very concept of gratuity itself. As far as CTC is concerned, gratuity component could be factored in but actual payment is neither helpful legally in discharging the liability nor is it a practice in the industry.

Dear friend from Chandigarh,
Provident Fund, Pension and Gratuity are the triple terminal benefits provided to the working class as measures of social security when they become jobless due to various reasons like old age, ill health, redundancy, resignation etc. If you critically analyze these concepts, their maturity of benefits is always interlinked with the cessation of the beneficiary's employment beyond certain age or certain predetermined number of years of service. Therefore, the idea of periodical payment of Gratuity while the incumbent is still in service, though seemingly fanciful, will certainly fail to achieve the purpose for which it was primarily conceptualized.

Mr. Umakanthan. M
Additional Commissioner of Labour (RTD)
Is the Payment of Gratuity Act being revised by the Govt.; where the minimum qualifying service for payment of gratuity is being reduced from 5 Years to ___ ?!

Talk of reducing period to 3 years is being heard.
Nothing official yet about this.
Cost of running an industry is increasing.

Dear Sandeep,
I've no idea about such a proposal. Already the amendment to the Rules under the IESO Act,1946 has diluted the concept of minimum qualifying service in respect of FTC employment in the matter of payment of Gratuity to such employees. So, anything may happen including the scrapping of qualifying service.

Thanks a lot for your valuable inputs Mr. Umakanthan.
Request you to throw some light on this as well: In case of death of an employee how much amount his/her nominee would be eligible for in - Scenario 1 where the death occurs after 3.5 years and scenario 2 where the death occurs after 6 years?
I had checked in the Gratuity Act however didn't get much clarification on whether the nominee would be eligible for the calculation based on the tenure spent or the maximum limit of gratuity that is 20 lacs.
Regards
Poonam

Section 4 in The Payment of Gratuity Act, 1972
4 Payment of gratuity. —
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,—
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement: 13 [Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.] Explanation .— For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:
A reading of this section gives clear idea of how gratuity is to be worked out