GRADUITY INFORMATION _ HOW TO CALCULATE…??

GRADUITY INFORMATION _ HOW TO CALCULATE…??


During working in any company, A portion of the salary of the employee is deducted in the form of provident fund and gratuity. In the early stages, it is voluntary and depends entirely on the employee. In the Gratuity Act, 1972, each company, which has more than ten employees, is obliged to give gratuity to employees. In this act, the employees are those whom the company keeps on salary. Apart from this, trainees do not get gratuity. The basic salary of the gratuity employee is given on the basis of the amount of dearness allowance.

If the limit of gratuity is up to Rs 3,50,000, it is free from the income tax limit. At the same time, the full amount of income-tax is free from government employees. The company has the right to voluntarily give more gratuity to its employees. But the gratuity received as an additional benefit falls under the income tax. In addition to this, if the employee dies, his gratuity gets instant gratuity, there is no income tax on this gratuity. The company can cut some part of the employee's salary as a gratuity under CTC (Cost to Company) account. Before leaving the company, the employee should be informed about this.

Gratuity can invest in the pension plan, the private provident fund and the equity. It is worth mentioning here that if the employee wants to invest in them, then he should invest in such a fund which makes him regular income. This retirement proceeds will also continue to be paid in its regular pay scale.
Gratuity is a benefit received by an employee for services rendered to an organisation. For companies covered under the Gratuity Act, this benefit is paid when an employee completes five or more years of service with the employer. An employee gets gratuity when he/she resigns, retires or is laid off. In case of death or disablement there is no minimum eligibility period.

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