Dear Respected Seniors, I received the following mail from my HR (as all in the organization have received). I have resigned from this organization on 30th March after completing 4 years and 14 days of service, and my last date is 29th April as per my notice period. We are transitioning from a yearly gratuity system to this 5-year one.
My questions are:
1) Will I get my gratuity for this 4-year tenure period?
2) Will it be paid as tax-free or as a taxable remuneration?
Regards,
Rihaan 111
_________________________________________
Dear Team,
It is our continuous endeavor to align XXXX policies and processes with best practices in order to provide a seamless, continuous, and consistent framework for all employees.
Standardizing the Payment of Gratuity Policy
In light of the above endeavor, we propose to standardize the policy governing the Payment of Gratuity for all employees at XXXX.
Transition Details
To get into further details, as of 31st March 2019, we propose to transition employees for whom gratuity is part of their individual cost to company (CTC) towards strict adherence to the Payment of Gratuity Act-1972. As per the provisions of the Act, gratuity eligibility is after 5 years of continuous service with an organization.
Salient Points of the Transition
- The gratuity eligible to incumbents as of 31st March 2019 would be paid off in full and individuals transitioned as per the Payment of Gratuity Act 1972.
- Effective 1st April 2019, the amount shown as gratuity in the current CTC structure would be merged within the Gross per annum. By this method, the compensation figure for each individual would remain consistent across the transition.
- For individuals transitioned on 1st April 2019, gratuity will be eligible on separation after 5 continuous years of service. While calculating tenure of service for gratuity eligibility, the original date of joining would be considered. This way, service tenure would be protected for all individuals.
- During separation for eligible staff, as specified by the Payment of Gratuity Act, calculations would be done on the last drawn salary in order to arrive at the eligible amount. From this figure, the amount already paid to employees during the transition in March-April would be deducted before final payoff.
It’s our firm belief that these actions would help us administer policies in a time-bound, consistent, and effective manner. We count on your support as always to make this exercise a smooth and seamless endeavor. Please feel free to get in touch with the undersigned by phone on [Phone Number Removed For Privacy-Reasons] or by email on [Email Removed For Privacy Reasons] in case of any queries or clarifications. I look forward to any discussion you may want to have with me regarding the specified course of action.
________________________________________
From India, New Delhi
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5My questions are:
1) Will I get my gratuity for this 4-year tenure period?
2) Will it be paid as tax-free or as a taxable remuneration?
Regards,
Rihaan 111
_________________________________________
Dear Team,
It is our continuous endeavor to align XXXX policies and processes with best practices in order to provide a seamless, continuous, and consistent framework for all employees.
Standardizing the Payment of Gratuity Policy
In light of the above endeavor, we propose to standardize the policy governing the Payment of Gratuity for all employees at XXXX.
Transition Details
To get into further details, as of 31st March 2019, we propose to transition employees for whom gratuity is part of their individual cost to company (CTC) towards strict adherence to the Payment of Gratuity Act-1972. As per the provisions of the Act, gratuity eligibility is after 5 years of continuous service with an organization.
Salient Points of the Transition
- The gratuity eligible to incumbents as of 31st March 2019 would be paid off in full and individuals transitioned as per the Payment of Gratuity Act 1972.
- Effective 1st April 2019, the amount shown as gratuity in the current CTC structure would be merged within the Gross per annum. By this method, the compensation figure for each individual would remain consistent across the transition.
- For individuals transitioned on 1st April 2019, gratuity will be eligible on separation after 5 continuous years of service. While calculating tenure of service for gratuity eligibility, the original date of joining would be considered. This way, service tenure would be protected for all individuals.
- During separation for eligible staff, as specified by the Payment of Gratuity Act, calculations would be done on the last drawn salary in order to arrive at the eligible amount. From this figure, the amount already paid to employees during the transition in March-April would be deducted before final payoff.
It’s our firm belief that these actions would help us administer policies in a time-bound, consistent, and effective manner. We count on your support as always to make this exercise a smooth and seamless endeavor. Please feel free to get in touch with the undersigned by phone on [Phone Number Removed For Privacy-Reasons] or by email on [Email Removed For Privacy Reasons] in case of any queries or clarifications. I look forward to any discussion you may want to have with me regarding the specified course of action.
________________________________________
From India, New Delhi
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What I could understand from this is that you should ask the company for a refund of the gratuity charged during your 4-year stay. I presume the amount may have been deducted as gratuity from your pay. If such amounts are now refunded, it would be taxable.
From India, Pune
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From India, Pune
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Payment of Gratuity Act, 1972 & The Rules.ppt
FORM - F (TN Payment of Gratuity Rules, 1973).xls
Abstract of PAYMENT OF GRATUITY ACT & RULES, 1972, FORM U[1].doc