What do the rules of gratuity say?

Utility What do the rules of gratuity say? Gratuity is an amount that the company gives to the employee. Nowadays, everyone wants to know the rules about gratuity. In such a situation, let us know the method of counting gratuity and its rules. Gratuity is only available to the employee after at least 5 years or in some cases 240 days of service. This amount is given upon retirement, leaving the job or death of the employee. In case of death or disability, the 5-year condition is waived. In such a situation, the company has to pay the gratuity amount within 30 days, otherwise 7% interest may be charged on it as per the rules. Under the Payment of Gratuity Act, 1972, it is tax-free up to Rs 20 lakh. If the amount exceeds this, tax must be paid on it. For example, when someone left a company, he took a fee of Rs 17 lakh from it. After that he joined another company and took a fee of Rs 5 lakh from there too. In total, this amount was Rs 23 lakh. In such a situation, that person will have to pay income tax on Rs 3 lakh as per the rules. Under gratuity, an amount equivalent to 15 days’ salary is given for every full year of service. To calculate this, the formula ‘(15 × Last Salary × Years of Service)/26’ should be used. Here last salary means the sum of basic pay and DA. Click here for more stories of life and style Click here