Dear all
How to calculate gratuity in a proprietorship Company. suppose a employee service provied around 7 year 5 months & 20 days at present basic salary 15700+ HRA 3500+Con 800 = totat salary is 20000/- p. m. & if service provided 7 years 9 months 15 days its two Question Please inform us.
Thanks
Ramanuj
The Payment of Gratuity Act (like any other labour Act) has nothing to do with how the ownership of the establishment is formed. Therefore, there is no difference in the treatment when the establishment is set up as Proprietorship or Company form (private limited or Public limited)
Gratuity formula -> last drawn basic salary*15/26*no.of years of service.....
IF gratuity is not covered under Payment of gratuity Act
We need avg. of 10 months preceding the month of retirement
last drawn salary
If not covered
Exempt amount is LOWER OF
10,00,000
Gratuity received
15/30 X avg. of 10 months preceding the month of retirement X completed year of service
Note: Salary for this puprose means Basic + DA (IF forming part of gratuity) + Comm. (sales based)
(HRA is not included)
If covered , exempt lower of
15/26 X LAST DRAWN SALARY X Completed year of service or part of the year if in excess of 6 mnths
10,00,000
Gratuity received
Salary here means Basic + DA only
CAclubindia
