Please clarify the gratuity calculation. Some say to calculate it on Basic, while others suggest using Basic + DA. The P.F. deducted was fixed at Rs. 650/-. Is there any government notification on the calculation part? It is urgent. Please help.
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From India, Mumbai
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From India, Mumbai
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Gratuity Calculation
Gratuity will be calculated on Basic + DA. The statutory contribution on PF is restricted to a salary of Rs. 6500. However, based on the agreement between the employer and employee, the contribution can be paid on the actual salary.
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Abbas.P.S
From India, Bangalore
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530Gratuity will be calculated on Basic + DA. The statutory contribution on PF is restricted to a salary of Rs. 6500. However, based on the agreement between the employer and employee, the contribution can be paid on the actual salary.
Regards,
Abbas.P.S
From India, Bangalore
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I have found this answer on the LawyersClubIndia.com forum. Can you please clarify the same?
Gratuity Calculation Clarification
I have also received the gratuity on the basic pay itself. As your PF deductions are also based on the basic salary only, DA is not included. If PF deductions are inclusive of DA, then only gratuity will also be calculated on the basis of inclusive of DA. Since DA is not included in the contribution of PF, then DA is also exclusive of gratuity calculation.
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T. Krishna Rao
From India, Mumbai
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Gratuity Calculation Clarification
I have also received the gratuity on the basic pay itself. As your PF deductions are also based on the basic salary only, DA is not included. If PF deductions are inclusive of DA, then only gratuity will also be calculated on the basis of inclusive of DA. Since DA is not included in the contribution of PF, then DA is also exclusive of gratuity calculation.
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T. Krishna Rao
From India, Mumbai
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For PF also DA should be included. In any Forum that publish public response/opinion, there can be errors. Abbas.P.S
From India, Bangalore
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From India, Bangalore
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In the whole act of Gratuity, the term used is Basic Salary, i.e., basic only. While we go through the PF act, the term used is (Basic + DA + RA). So, my opinion is that the calculation of gratuity should be done on the basic salary only. I invite the suggestions of more friends to clear the confusion.
From India, Mumbai
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From India, Mumbai
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Hi Abbas and Friends,
In the whole act of Gratuity, the term used is Basic Salary, i.e., basic only. When we refer to the PF act, the term used is (Basic + DA + RA). Therefore, in my opinion, the calculation of gratuity should be done based on basic salary only. I invite the suggestions of more friends to help clear the confusion.
Section 2(s) of the Payment of Gratuity Act, 1972
Kindly go through Section 2(s) of the Payment of Gratuity Act, 1972. "Wages shall consist of basic plus D.A., as per the last drawn salary. However, allowances like bonus, commission, HRA, overtime, etc., are not to be considered for calculations." [Section 2(s)].
Regards,
Abbas
From India, Bangalore
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In the whole act of Gratuity, the term used is Basic Salary, i.e., basic only. When we refer to the PF act, the term used is (Basic + DA + RA). Therefore, in my opinion, the calculation of gratuity should be done based on basic salary only. I invite the suggestions of more friends to help clear the confusion.
Section 2(s) of the Payment of Gratuity Act, 1972
Kindly go through Section 2(s) of the Payment of Gratuity Act, 1972. "Wages shall consist of basic plus D.A., as per the last drawn salary. However, allowances like bonus, commission, HRA, overtime, etc., are not to be considered for calculations." [Section 2(s)].
Regards,
Abbas
From India, Bangalore
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