Grautity
This query is : Resolved
22 November 2012
If I am an Employer, And i satisfy the employer definition as per Gratuity Act. From when I have to make the provision for Gratuity in my books, against Gratuity payable for my employees.After one year I have to tell my employee to make a nominee for his amount. If none of my employee for works for 5 years, what should I do with that amount,Can I withdraw that amount and utilise that any other purpose. Can I forfetied that amount.
22 November 2012
You need to make the provision on the basis of acturial valuation. An employer in the first year of its business need not make gratuity provision.
22 November 2012
But none of my employee works for 5 years, the what should i do that amount, can i forfit it and use for another purpose..
23 November 2012
If that be the case, you need not make any provision for gratuity. Gratuity is meant for LONG TENURE provision. The conclusion that "employees" stay with you for less than 5 years need to be drawn with a long and broad DATA... say 10 to 15 years.
23 November 2012
Dear sir ,
As per Payment of Gratuity act 1972 ,
an employee is not entitled to receive the gratuity if he has not served for continuous 5 years of service . So he legally cannot claim the grauity if he does not work for more than 5 years .... So in your case since no employee does not work for more than what ever provision you have made you can write it back in P/L A/C if he does not serve more than 5 years .....
So legally no liability arises in case of employer for gratuity if he does not work for more than 5 years .....
As per Payment of Gratuity act 1972 ,
an employee is not entitled to receive the gratuity if he has not served for continuous 5 years of service . So he legally cannot claim the grauity if he does not work for more than 5 years .... So in your case since no employee does not work for more than what ever provision you have made you can write it back in P/L A/C if he does not serve more than 5 years .....
So legally no liability arises in case of employer for gratuity if he does not work for more than 5 years .....
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