Gratuity

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 May 2012 SIR,
I PREVIOUSLY WORKED A PRIVATE LIMITED COMPANY AND I GET GRATUITY. AFTER THAT I RESIGNED JOB AND NEWLY JOINED AT ANOTHER COMPANY NOW I COMPLTED 6 YEARS CAN I ELIGIBLE TO TAKE GRATUITY AFTER RESIGNATION. MY HR SAID ALREADY ONES RECEIVED GRATUITY IN PREVIOUS COMPANY YOU ARE NOT ELIGIBLE TO TAKE PRESENT COMPANY. IS THIS CORRECT

Sanjay Chauhan (IFRS)

Sanjay Chauhan (IFRS) (Expert)
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19 May 2012 There is no bar on receiving gratuity form more than one employer.

If the employee has served 3 organisations in 17 years with 5 years uninterrupted service in all three, then the emplyee can receive Gratuity from all three.

However, from Tax perspective, the exempted limit of Gratuity will keep on reducing.

if we take the example forward, assume that the tax free limit is exempted in the third service period, if the employee renders 5 years on uninteruppted service to the forth employer, he/she will be eligible for gratuity, but this time it will be taxable in the hands of employee since his/her limit is exhausted.

In summary, gratuity eligibility will be determined from the Company's policy and its taxability will be governed seperately during the life of employee.

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