DEATH CUM RETIRMENT GRATUITY

Meaning of Gratuity

Gratuity is the amount paid by an employer for the services rendered by an employee during their employment period. According to the law, employees have the right to avail gratuity after working in an organization for 5continuous years

Exemption of Gratuity

  A.    For Government Employee- Fully exempt from tax

 B.     Non-Government Employee –covered by Payment of Gratuity Act 1972

                   

EXEMPTION (least of the following is exempted)

                                i.            Last drawn salary * (15/26) * Number of years of service

                              ii.           Rs.20,00,000

                            iii.           Gratuity actually received

C.   C. Non-Government Employee –covered by Payment of Gratuity Act 1972

EXEMPTION (least of the following three)

                                i.           ½  month salary for every completed years of service on the basis of average salary drawn during 10 months immediately preceeding the month of retirement

                              ii.           Rs.20,00,000  

                            iii.           Gratuity actually received

 

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