gratuity working

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Student (Querist)
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13 August 2010 Hello Expert,

1)Can gratuity be shown as expense in P&L a/c?

2)Is this logic as per gratuity act? or correct??
Gratuity paid = Basic+DA * No. of years service
If basic is 10000 then gratuity after 5 yrs= 10k*5 yrs = 50000
Deduction made from salary every month
50000/5*12=833
so by the end of 5 yrs co. will accumulate 50000
that can be paid as gratuity.

regards
kirti

srinath

srinath (Expert)
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13 August 2010 in accounts even the gratuity provision should be shown in the P&L a/c

gratuity should be paid in addition to the basic pay and not deducted and to be paid......

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