Gratuity Rules: What is gratuity, how much will be deducted and when it will be received

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Gratuity Rules
Gratuity Rules: What is gratuity, how much will be deducted and when it will be received

Gratuity Rules: Gratuity is applicable to employees. This is the amount received at the time of retirement. It will be deducted from your salary every month. Most people do not know the complete information about gratuity. Those details are for you..

Gratuity Rules: Gratuity is a facility provided by the company to the employees. A certain amount is deducted from the salary every month. However, many people do not care about the details of how much will be cut, when it will be received, whether it will actually be received or not. All the details are complete in the offer letter given by the company while joining the job.

Generally everyone focuses on details like HRA, CTC amount, basic salary. Don’t care about gratuity. This is also a kind of allowance. Gratuity is deducted from your salary every month. The offer letter contains the gratuity details. The CTC package given by the company means the gratuity share in the cost to the company. Generally, most companies deduct 4.81 percent from the basic salary as gratuity.

The central government has also framed a gratuity law for employees. According to the Gratuity Act, 1972, 4.81 percent is deducted from the basic salary every month. If an employee’s annual salary is 5 lakh rupees, then 24,050 rupees will be deposited in the gratuity fund per year if calculated as 4.81 percent gratuity. That means every month the company will cut 2 thousand rupees. The company is liable to pay the gratuity as it is an amount deducted from the employee’s salary.

According to the Gratuity Act, 1972, gratuity facility has to be provided to the employees. That is why every month some amount is cut from the salary. If the employee works in the same company for 5 years, the employee is entitled to gratuity. If the job changes within five years, the company does not pay gratuity.

Read also: 7th Pay Commission: Good news for government employees, decision on arrears;…

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