From the abobe all I would like sum up for the benifit of all:
1.As per AS-15 organisations are supposed to work out the liability for all employees irrespective of the tenure of service and provide the same in accounts.This amount has to be worked out with the help of an approved valuer. Normally valuation is done on annual basis.The same may be funded or may not be funded.
2.There is no compulsion that the amount has to kept with LIC even the organisation can have a trust of its own funding as per valuation and maitaining as per guidelines of Income Tax Act and discharging the liability as per PGA.
3.Employee has no right to claim the amount unless he completes 5 years of service.But the employer showing it as part of CTC is a bargain between the employer and employee.It is also trasferable from one employee to another provided both the employers agree for the same.
4.When it is kept with LIC the amount in respect of employees who have not qualified to receive the same will be refunded back to the employer or adjusted in future payment by employer.
Hope the poits are clear.
K.Krishna Murty
I need clarification on which basic gratuity is calculated in corporate /BPO companies.
Example: employee joined a company on 3-8-2009, if he completes 3-8-2014. Then he had successfully completed 5 year with 120 days of Loss of pay, kindly explain whether that employee is eligible for gratuity or not as per Gratuity Act 1972. Kindly send my legal documents (if any)
(note: can also send the mail at mpratish22 @ gmail.com)
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