Gratuity Claim Dilemma: Should I File in Chennai or Nellore for My SEZ Company?

I have been working with a company with headquarters in a Pvt. SEZ in AP. However, my location of service was Chennai, and I served this company for 7 years. In Oct 2018, I resigned from my post for a better opportunity. The company has been delaying my F&F citing various reasons. It has been almost 7 months now, and I have sent Form I to recover my gratuity. I have a doubt regarding jurisdiction. This SEZ falls under Nellore district. Therefore, if the company rejects my claim or offers a reduced gratuity amount, where should I file Form N? Should it be in Chennai or in Nellore district?

Kindly advise.

Thank you.

Head office/registered office is in Nellore.

You can file a complaint at the jurisdictional Labour Commissioner's office there.

Jurisdiction for Filing Gratuity Claims in SEZs

Under the Special Economic Zones Act, 2005, various State Governments have provided for the resolution of industrial disputes under the Industrial Disputes Act, 1947, pertaining to SEZs as the responsibility of the Development Commissioners. As far as I understand, the modus operandi for the disposal of statutory claims, like a claim for gratuity under the Payment of Gratuity Act, 1972, remains the same as before. In other words, with specific reference to the questioner's status as an employee of a company registered and located in an SEZ but who last worked in a place outside the location of the SEZ, the jurisdiction for filing a claim under the Payment of Gratuity Act, 1972, is determined by the place of his work only.

Therefore, the poster has to file a claim for gratuity before the area Controlling Authority under the Act at Chennai only.

Thank you very much for the reply. Further to the above query, I have sent Form I and received some acknowledgment from the employer's side. However, as per the calculation, they are showing deductions for TDS on the amount. The actual gratuity value is lower than calculated, as well as the ₹20L ceiling. Despite this, they are adamant about deducting TDS and are attempting to negotiate with me regarding not paying interest for the last 6 months.

Filing Form N for Gratuity

Do I have the option to file Form N before the labor commissioner to receive my full gratuity amount? I am aware that I can get a refund of TDS by filing my return, but to receive the interest, should I file Form N? Additionally, my EPF used to be deposited at the Kadapa range. Will the gratuity claim through Form N also need to be done at AP, i.e., Kalahasti?

Kindly advise.

Thank you

Gratuity Exemption and Jurisdiction for Legal Claims

It is quite astounding to note that the Accounts Department of a company in a Special Economic Zone (SEZ) is so ignorant about a common provision of the Income Tax Law of the country. Gratuity, being a statutory terminal benefit payable by every employer to whose establishment the Payment of Gratuity Act, 1972 is applicable, is already tax-exempt up to the ceiling of Rs. 10 lakh under section 10(10) of the Income Tax Act. After the raising of the ceiling by the Central Government, the Central Board for Direct Taxes (CBDT) has clarified through its notification no. S.O. 1213(E) dated 08-03-2019 that the exemption limit of Rs. 20 lakh would be applicable to employees in the event of retirement, death, resignation, or disablement on or after 29-03-2019. It is not ignorance but impudence.

Filing Gratuity Claims in Chennai

I reiterate that the place where you worked last determines the jurisdiction for legal employment claims. As such, you should file your claim before the Assistant Commissioner of Labour (Gratuity), Office of Deputy Commissioner of Labour I or II, Chennai (now redesignated as Deputy Commissioner of Labour and Joint Commissioner of Labour, respectively). Kindly verify with the Labor Commissioner's Office at Teynampet, Chennai for accurate information. Payment of interest on delayed disbursement of gratuity is a must, whether the employee insists on it or not.

Thank you very much for the advice. I received my full gratuity payment. However, they have added the gratuity to my salary and deducted the TDS amount from my pending notice period salary. I resigned from this company on September 12th and served a two-month notice period. They paid me for one month, and for the other month, they have withheld payment citing various reasons.

Options for Receiving Salary Through IT Department

1) Do I have the option of receiving this salary from them through the IT department? If yes, what might be the procedure? Also, they have not paid me the interest on my gratuity which they held for 7 months. Since my salary is stuck with them, I don't want to file Form N right now as it may hinder the release of my pending salary. Once they release the pending salary, I plan to file Form N.

Timelines for Filing Form N

2) Could you kindly advise if there are any timelines for filing Form N from the date of receiving the full gratuity amount to claim the interest part? Additionally, the TDS they are deducting from my salary, which accrued in November 2019, has not been deposited with the IT department.

TDS Deduction and Reflection in Form 16

3) Please advise whether they will deduct TDS just before releasing the salary or if it would have been deducted already (as my 26AS does not reflect this TDS amount as of yesterday, May 21, 2019).

4) Will the deducted TDS amount be reflected in my Form 16, which they usually release by June 20th?

Mandatory Salary Release with TDS Deduction

5) If they are deducting TDS, is it mandatory for them to release my salary, considering I am paying TDS on an amount that has not been realized if they withhold my salary?

Please help with these queries as I am feeling quite confused at the moment.

Thank you.