Gratuity

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Divya P K (Querist)
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04 April 2016 Can an employer can give gratuity to his employee on his personal will if he have only 3 employees on his firm.
the firm is not paying esi and pf too.
where it is saying it in the gratuity act ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 April 2016 Employer can pay gratuity at his will if No. of employees is less than 10. Nothing is said in the gratuity act about it.

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Divya P K

Divya P K (Querist)
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04 April 2016 is it Ex-gratia gratuity ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 April 2016 No idea about it..........

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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04 April 2016 Gratuity is paid to employees who complete the continuous service minimum of 5 years. As per Gratuity Act 1972 15 days salary based on last drawn calculated for every completion of year.
Subject to maximum of Rs.1000000/-
Exgratia sum paid without any obligation or liability to pay it.

For gratuity or ex gratia payment minimum number of employee is not criteria. It is based on length of service.

Amount paid by employer can be treated Exgratia and taxable Under the Head Income from salary.

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