{"id":6062,"date":"2023-11-14T10:58:03","date_gmt":"2023-11-14T10:58:03","guid":{"rendered":"https:\/\/nextinnovationasia.com\/blog\/?p=6062"},"modified":"2023-11-14T10:58:04","modified_gmt":"2023-11-14T10:58:04","slug":"the-payment-of-gratuity-act-1972","status":"publish","type":"post","link":"https:\/\/nextinnovationasia.com\/blog\/the-payment-of-gratuity-act-1972\/","title":{"rendered":"The Payment of Gratuity Act, 1972"},"content":{"rendered":"\n<p class=\"has-black-color has-text-color\"><strong>Purpose:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">The act aims to provide a monetary benefit to employees as a gesture of gratitude for long and meritorious service.<\/p>\n\n\n\n<p><strong>Eligibility Criteria:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">An employee becomes eligible for gratuity after completing five years of continuous service with the same employer.<br>For disabled employees or in case of death, the requirement of continuous service is waived.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\"><strong>Calculation of Gratuity<\/strong>:<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">Gratuity is calculated based on the employee&#8217;s last drawn salary and the number of years of service.<br>The formula is: Gratuity = (Last Drawn Salary \u00d7 15\/26) \u00d7 Number of Years of Service.<\/p>\n\n\n\n<p><strong>Payment Events:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">Gratuity is payable on retirement, resignation, death, or disability due to an accident or illness.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\"><strong>Nomination:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">Employees have the right to nominate a family member who would receive the gratuity in case of the employee&#8217;s demise.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\"><strong>Maximum Limit:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">The maximum gratuity payable is capped at \u20b920 lakhs as of the latest amendment in 2018.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\"><strong>Employer&#8217;s Obligations:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">Employers are obligated to arrange for the payment of gratuity, maintain records, and display the abstract of the Act.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\"><strong>Tax Implications:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">Gratuity received is exempt from income tax up to a certain limit, as specified by the Income Tax Act.<br>Legal Recourse:<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">If an employer fails to pay gratuity, an employee has the right to approach the Controlling Authority under the Act for resolution.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\"><strong>Amendments:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">The Act has undergone amendments to increase the maximum limit and adapt to changing economic conditions. service.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color\"><strong>Eligibility Criteria:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color\">An employee becomes eligible for gratuity after completing five years of continuous service with the same employer.<br><\/p>\n\n\n\n<p><strong> <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Purpose: The act aims to provide a monetary benefit to employees as a gesture of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-6062","post","type-post","status-publish","format-standard","hentry","category-next-innovation-asia"],"_links":{"self":[{"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/posts\/6062","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/comments?post=6062"}],"version-history":[{"count":2,"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/posts\/6062\/revisions"}],"predecessor-version":[{"id":6064,"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/posts\/6062\/revisions\/6064"}],"wp:attachment":[{"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/media?parent=6062"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/categories?post=6062"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nextinnovationasia.com\/blog\/wp-json\/wp\/v2\/tags?post=6062"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}