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Clarification required on the CTC

This query is : Resolved 
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(Querist)
14 February 2025 Dear Experts,

I seek clarification regarding the inclusion of gratuity as part of the Cost to Company (CTC). Many companies include gratuity in the CTC structure, but as I understand, gratuity is a loyalty benefit paid by the employer only after the completion of five years of service.

If gratuity is included in the CTC, should it be paid to the employee as part of the full and final (F&F) settlement upon exit, even if they have not completed five years? Additionally, is it appropriate to include gratuity in the annual package from a compliance and ethical standpoint?

I would appreciate a clear perspective on this matter.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
15 February 2025 Yes, gratuity can be a part of your CTC.

And you cannot demand gratuity if you leave the company before 5 years.
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