Sec 4 of P G Act, 1972 confers a right on the employee to receive gratuity. Here the conditions apply that he must have rendered continuous service for not less than 5 years...but u have completed only 3 years of service so according to me you are not liable for this gratuity amount yet. You should talk to HR people of your company regarding this whole issue that why they have added this gratuity in your CTC. Shivani Pathania
From India, Chandigarh
1From India, Chandigarh
Hi, Gratuity is payable only after completion of five years continuous service. Before it we can not claim on our early leaving.Rule is Rule Regards, Dinesh Chandra Sharma
From India, Gurgaon
From India, Gurgaon
yes, gratuity is payable, as per the law, after continuous services (without any break) of 5 years. adding gratuity in CTC only an eyewash and no company, i think, will give gratuity if an employee leaves before 5 years of service, though it is added in your CTC. thanks
From India, Bhopal
From India, Bhopal
Mr. Malik I am your big fan because you are a straight forward writer and your brain and comment is remarkable. Anuj Tyagi 9811395646
From India, Gurgaon
From India, Gurgaon
Dear, Since your service was less than five years, you are not eligible for Gratuity payment. The concept of showing the Salary of an employee in the form of CTC (Cost To Company) is a gimmick developed by new generation companies particularly IT/ITES to attract employees and making them fool. The CTC will include all costs – fixed and variable, historic and future or actual and anticipated- which are to be incurred due to employment of a person. Under the CTC concept even the expenses which are to be met after 5 years of employment are not spared but the projected sum is distributed evenly through out right from the first month of service. Similar are the cases of Employees Provident Fund contribution and the Gratuity. These are statutory obligations of the employer. Though EPF contribution takes place every month the gratuity payment takes place only once and that also after five years of service. When no one is certain that he will be in continuous service for five years with an employer the practice of showing gratuity in the salary cannot be encouraged. More over, gratuity is not payable to any employee during his service but it is payable only when he leaves due to any reason including death. The practice of including employer’s contribution to EPF as part salary and then making a deduction of the amount from the salary shall be interpreted as recovering employer’s contribution from the employee and can be challenged as ‘ an employer shall not deduct his own share of contribution from the salary of the employee’. Similarly an employer cannot realize any amount from the employee for payment of gratuity in future. In the conventional style of salary fixation, the Basic Salary is fixed and allowances like Dearness allowance, House rent Allowance etc are declared as percentages of the fixed basic. The other benefits will be offered as ‘stated in the standing orders of the organisation’. or benefit available to the employees of a particular category. Including everything in CTC is not a best practice to be encouraged, rather Gross Salary concept is always better option to elaborate the structure of salary. Thanks Mohd. Arif Khan
Hi members If company shows gratuity in the CTC it will pay as and when we releived from the company services if it organizes a gratuity trust. Even the employee works for one month he will be eligible for the gratuity if it shows in CTC. i had a experience as i got the gratuitycheque from the company as i worked for 1.8 years. Infact it depends upon the company. rgds S.V
From India, Hyderabad
From India, Hyderabad
Hi members If company shows gratuity in the CTC it will pay as and when we releived from the company services if it organizes a gratuity trust. Even the employee works for one month he will be eligible for the gratuity if it shows in CTC. i had a experience as i got the gratuitycheque from the company as i worked for 1.8 years. Infact it depends upon the company. rgds S.V
From India, Hyderabad
From India, Hyderabad
hello,:neutral: yes, I am also agree with the other comments, the gratuity is payable after a five year continuous service in a establishments and it can be a part of CTC. Pramod Sharma
From India, Faridabad
From India, Faridabad
Organizations will have to account for Gratuity payment, hence it will be shown under CTC. As per gratuilty Act, gratuity is payable only after 5 years (non taxable). If gratuity is included and deducted from your monthly gross salary then may be you can claim it as taxable at the time of leaving (before 5 years). But this will depend on organizations decision.
From India, Bangalore
From India, Bangalore
Hi, There is a provision in the Shops & Estb. Act (Andhra Pradesh in particular)which says that for every completed year of service, the employer has to pay 15days salary on the last pay of the employee. Check whether the same provision is applicable in your respective state. Thanks, AR Sai
From India, Hyderabad
From India, Hyderabad
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Gratuity to teachers - Revised SC order.pdf
Company Profile.ppt