Gratuity Rules: When people retire, the money that is given to them every month after retirement is called pension. But the lump sum amount that is received after leaving the job is called gratuity. Not everyone gets gratuity. Some rules have been made for this and it is given according to that. Generally, gratuity is given to any employee after retirement. But according to the rules, gratuity can be given before retirement as well.
But for this, it is necessary to complete 5 years of service. Payment of Gratuity Act was made in India in 1972 for gratuity. Its purpose was to provide financial benefits to those people who have worked for a long time in a company. Let us know who is given gratuity and what is the method of its calculation.
What is gratuity?
Gratuity is given by companies to their employees as a token of gratitude for the work done by them. Any employee must work for 5 years in that company to get gratuity. Gratuity is given to both government and private employees. Gratuity and Payment Act applies to all companies, factories, mines, oil fields, ports, railways in India. Any company in which more than 10 employees work also allows giving gratuity to its employees.
Who gets gratuity?
If any employee works in an institution for 5 years, he becomes eligible to get gratuity. But in many places, gratuity is applicable even for less than 5 years. According to Section 2A of the Gratuity Act, if an employee works in an underground mine, he can get gratuity after 4 years and 190 days.
But apart from this, in any other institute or company, gratuity is given only after 4 years 240 days i.e. 4 years 8 months. Please note that the benefit of gratuity can be availed only after retirement, you cannot avail this benefit while working in the company.
How to find out how much gratuity I will get?
It is easy to find out how much gratuity you will get after retirement or after leaving the job. For this, you can find out by calculating your basic salary and DA (dearness allowance) x (15/26) x (number of years worked). For example, your basic salary and DA (dearness allowance) together are ₹40000. You have worked in the company for 10 years. So you will get 40000 x (15/26) x 10 = 230,769 rupees as gratuity.
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