Is gratuity payable to employees who have been asked to leave or involuntary exit? Also what's the calculation to be considered for gratuity payment, is it (15xbasicxno.ofyrs of service) / 30?

Gratuity is payable to all employees, irrespective of voluntary or involuntary exit. It can withheld on very few specific grounds, including forfeiture, harassment. The calculation of gratuity is (15 × last drawn salary × working tenure)/26

@Wristy If we are not registered woud it still be 30 or 26?

basic

Is it / 30 or 26, as I understand if we have not registered under gratuity act it would be 30 and 26 is for the companies that is registered under the gratuity act?

Are you making gratuity payments as the Income Tax Act?

No, nor is it being deducted nor is the payment been made to any trust.

Quick huddle?

@S M first of all, Gratuity is applicable only if the employee has completed 5 years in the continuous service of the organization. Secondly there are no deductions or contributions done for Gratuity, you just have to calculate and pay in the FNF settlement. Thirdly it is to be done basis 26 days. Need more clarity, feel free to ask.

Hi @Ashish Vyas @Wristy Is it necessary for the company to be registered under gratuity act to pay the gratuity amount for employees who completed 5 years?

As per provisions of Section 4A, No employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2) of THE PAYMENT OF GRATUITY ACT, 1972. As per understanding and experience, companies do not register under the gratuity act, yet the payment to employee are done.

@Ayushi Srivastava one has to register their establishment under Payment of Gratuity. Sharing the Act with you for your reference. For more specifications - you should refer to Payment of Gratuity Rules, available on Simplance. Snapshot here for your reference - Notice of opening, change or closure of the establishment (1) 1Within thirty days of the rules becoming applicable to an establishment, a notice in Form 'A' shall be submitted by the employer to the controlling authority of the area. (2) A notice in Form 'B' shall be submitted by the employer to the controlling authority of the area within thirty days of any change in the name, address, employer or nature of business. (3) Where an employer intends to close down the business he shall submit a notice in Form 'C' to the controlling authority of the area at least sixty days before the intended closure.

Thanks @Wristy @Ashish Vyas