Source: ET Wealth-10Jan2011
* Gratuity is a lump sum amount paid to an employee on retirement. Companies use it as a retention tool.
* You get gratuity if you have completed five years in a company. There is a cap of 10lakh
* Gratuity calculator:
(Your last drawn monthly salary(basic + DA) /26)*15*X=Gratuity
26=1 month
15=15 days of service in a year provided as DA
X = No of years worked
* If you completed 7 years of service and your last drawn salary was 45K per month, then gratuity = 1.8L
* This is mandatory for companies with more than 10 employees on their payrolls to give gratuity to employee on resignation, retirement and termination of service
* Condition of 5 years of service is relaxed in case of death or permanent disablement of the employee.
* Tax exemption has been raised to 10lakh.
* Gratuity is a lump sum amount paid to an employee on retirement. Companies use it as a retention tool.
* You get gratuity if you have completed five years in a company. There is a cap of 10lakh
* Gratuity calculator:
(Your last drawn monthly salary(basic + DA) /26)*15*X=Gratuity
26=1 month
15=15 days of service in a year provided as DA
X = No of years worked
* If you completed 7 years of service and your last drawn salary was 45K per month, then gratuity = 1.8L
* This is mandatory for companies with more than 10 employees on their payrolls to give gratuity to employee on resignation, retirement and termination of service
* Condition of 5 years of service is relaxed in case of death or permanent disablement of the employee.
* Tax exemption has been raised to 10lakh.
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