Gratuity act

This query is : Resolved

neha r (Querist)
Follow

05 April 2012 I work for a startup which is a subsidiary of a listed company.

Currently in the start-up, we have 7 employees out of which 4 have been transferred from the parent company and have been working in the parent company for more than 5 yrs, the other 3 are new employees.

we plan to have around 50 employees by the year end and a total of 150 by the end of 2 yrs.

Currently, deductions are being made from our CTC for gratuity.

My queries are as follows-

Is the gratuity act applicable to the this start-up (since we have only 7 employees as on date)?

If it not applicable then what happens to the deduction on account of gratuity to the old employees?

Request to please answer

CA Kishore Tallam

CA Kishore Tallam (Expert)
Follow

05 April 2012 Gratuity is applicable to entities with minimum employees of 10. gratuity cannot be deducted. It will be cost to company. Since gratuity is already included in the employees transferred from holding company, the company will pay to them only.

Message likes : 1 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now