Can I Claim Gratuity if I Leave Before 5 Years When It's Part of My CTC?

Dear All,

As per the rules, we are entitled to gratuity benefits if we have worked for at least 5 years or more with the company. Currently, I am working with a Mumbai-based company where gratuity is considered a part of the CTC. I have recently joined the firm, about 6 months ago.

If I were to leave the job after one or two years, could I still claim the gratuity amount, considering it is listed as an annual benefit in my CTC sheet?

Please advise.

S.K.

Thank you for your response.

I would like to inquire about what happens to the amount that is shown in CTC as an annual benefit, which the company sets aside. Does this amount go to the government or does it remain with the company itself?

S.K.

Well, as far as I know, the amount that is being deducted from your pay is given to you only in terms of Special Allowance or in any other form.

Hi!

Many organizations include gratuity as part of CTC. Here, the company contributes to the group gratuity schemes regularly. In case an employee leaves before completion of 5 continuous years, the company pays the amount payable as Ex gratia in the full and final settlement. I have seen these practices adopted in my organization as well. Ultimately, it depends on the approach of the employer.

- Hiten

Hi,

Legally, you will not receive gratuity. The fund goes to the trust, but if you are not eligible as per law, what happens to the money that was credited? The amount is not credited to your name. Even if you leave after five years, you can't claim from the trust; you always claim it from the company. This is the legal position as of today. I am not getting into details of what some organizations are practicing. But if you have seen your appointment letter, I am sure they would have mentioned, "You will be paid gratuity as per the provisions of the Gratuity Act."

Incidentally, the Labour Commission has now recommended that gratuity should also be treated like PF, a trust formed, money accumulated, and you can get it at the time of retirement.

Siva

Dear S.K.,

I received your reply. Thank you!

Bonus and Ex-gratia are separately mentioned in my CTC as annual benefits. Gratuity is also considered an annual benefit, and the company sets aside a specific amount for my gratuity valuation.

So, what about that money? After leaving the service within 2 years, will I only receive ex-gratia and bonus calculated on a pro-rata basis, or will I also receive the gratuity amount?

Please advise.

Thank you,
S.K.

Hi,

I will say no. I have never done this in my career. Changes are taking place, but as of now, the general practice is NO.

Siva