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GRATUITY
Payment of Gratuity Act - 1972
Rino Angusamy -
Meenakshi College For Women, Madurai
May 2019
WHO AM I?
RINO ANGUSAMY
MBA STUDENT
Background Aspiration Other Interests
FIRST YEAR
• From Ramanathapuram • To establish and succeed • Travelling to places
• B-Com in my own business in • Tennis
• Now pursuing MBA Madurai. • Cattle Farming
• Part time as , Asst Sales
Manager in a Sea Foods
Export Company
To develop myself as a socially responsible individual and to empower women in the society through my gained academic and
practical experience.
Gratuity - Quick Info
Gratuity is a reward for employee loyalty
What is Gratuity?
employee loyalty. If an employee stays on in a company for over five years, he is entitled to get
Gratuity is a reward for
gratuity when he retires, resigns or is retrenched.
monetary reward to be paid by the company in recognition of the employee's years of service in the organisation is
The
Most establishments employing 10 or more workers come under the Act. Roughly, the employee gets half a
month’s Basic and Dearness Allowance (DA) for every completed year of service as gratuity.
Gratuity = N*B*15/26
Few Significant Points about Gratuity
Employer’s Right
The employer has the right to reject payment of
gratuity to an employee if he/she has been asked to
leave his/her job owing to any misconduct.
Employee’s Death
In case of death of the employee, the nominee or
heir of the employee is paid the gratuity amount.
The taxation for this is calculated for the receiver
under the head – income from other sources.
Basic + DA
Final Figures
At the time of releasing
As per the act
Mr. X is an employee of ABC Pvt. Ltd. which is not covered under the Gratuity Act. The last basic salary that he has drawn is Rs.50,000 per month. He has been working in the
organisation for 10 years and 8 months. Thus, the gratuity amount for Mr. X will be as follows:
Basic + DA
Final Figures
At the time of releasing
As per the act
Actually it is a legal question and it is better the lawyer answers the question J
THANK YOU.