Gratuity Tips: Every important thing related to Gratuity for employed people- must be known..
On getting a job, you get a salary every month, and you also become entitled to many other benefits. These include EPF, Insurance, Mediclaim, and Gratuity. All have their benefits. The rules and regulations related to them are also different. If you are working or are going to join soon, then you need to know about these benefits. Here we are talking about gratuity. You can understand every important thing related to gratuity.
Gratuity conditions
Your company gives you a good amount in the form of gratuity payment at the time of retirement. The company gives you this amount even if you leave the job. The condition for this is that your job in the company should not be less than 5 years. Government employees also get the benefit of gratuity (Central government employees gratuity). This is a reward for working for a long time. If you have worked in the same company for more than 20 years, then you get a good amount in the form of gratuity on retirement.
Benefits of Gratuity
If 10 or more people work in a private or government company, then the company must give the benefits of gratuity to all the employees. Apart from the company, shops, mines, and factories come under the purview of this rule. The government has made this rule so that after years of service, the employee gets a good amount to fulfill his responsibilities at the time of retirement.
Gratuity is given to the nominee.
If an employee dies during the job, then the entire amount deposited in his gratuity account is given to his nominee. In such a case, the condition of working for at least 5 years does not apply.
Gratuity Act 1972
The Gratuity Act was implemented in 1972 (Gratuity Payment Act 1972). It was started to give a good lump sum amount to the employees on retirement. It is an important part of the benefits related to the job. But people, especially private sector employees, do not give much importance to it. The reason for this is that they change jobs frequently.
Gratuity calculation formula
There is a formula to decide the amount of gratuity. According to the Gratuity Act 1972, 15 15-day salary for every year of a job is made for gratuity. This formula is Salary * Years of job * 15/6. Here salary means basic salary and DA (Dearness allowance). 15 means the day of every month for salary. 26 means the working days of every month.
Gratuity for private employees
The limit for gratuity (Gratuity increased up to 20 lakh rupees) for private sector employees has been increased to Rs 20 lakh. They will not have to pay tax on this money. The amount received by government employees under gratuity is already tax-free.