Gratuity amount will be paid if we complete minimum 5 years of service in one orgnisation.
If i have completed 4 years of service in one organisation, and joined in another organisation, i will not get the gratuity amount which is deducted from my salaray.
Where my amount is going? And how it will be utilised. In present situation we have private jobs and we need to change jobs within 5 years. How this is fair rule.
09 February 2012
a company provides for gratuity in respect of all its employees every year. the same is paid when an employee leaves. as per income tax act, 1961, an employee is eligible for exemption u/s 10 (10), if he has completed 5 yrs of service. however, some companies pay the gratuity amount even if the employee has not completed 5 yrs of service.
In the present case, if an employee resigns before completion of 5 yrs, the amount of gratuity provided in earlier yrs is reversed.
09 February 2012
Gratuity is not a deduction from salary like EPF, it is the terminal/periodic benefits that do accrue like Bonus and paid to eligible employees. Some of the organizations do go for Gratuity insurance and they pay back the amount received to the employee concerned. Further please check whether you have completed 4 years and 6 months which qualifies for gratuity payment like 5 years' performance term.
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