Gratuity: Most employees do not know this rule... All private and government employees get 'gratuity', but the conditions are strict..

Employees working for a long time in private and government institutions are given gratuity as a financial gift by the institution in return for their service. CA Pradeep Hisaria told Local 18 that to avail the benefit of gratuity, an employee working in any private or government institution must work in the same institution for a minimum of five years continuously. If a person leaves the job or changes the institution before the completion of five years, then he does not get the benefit of gratuity.

He said that the benefit of gratuity is available in those institutions where 10 or more employees are employed and where an ESIC facility is available.

How is the amount of gratuity decided?

Pradeep Hisaria said that the amount of gratuity is decided based on the last monthly salary of the employee at the time of retirement. In this, the salary of 15 days of the last month is divided by 26 and multiplied by the number of years of service. On this basis, the total gratuity amount is determined.

Provision of income tax exemption

He said that the maximum amount of Rs 20 lakh received as gratuity is exempted from income tax.

Gratuity can also be received in the form of a loan.

If the employee needs money in an emergency after completing five years of service, he can also get the gratuity amount in the form of a loan. However, its final settlement takes place only at the time of retirement of the employee or when he leaves the company.

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