{"id":10182,"date":"2022-09-14T16:08:56","date_gmt":"2022-09-14T10:38:56","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=10182"},"modified":"2022-09-14T16:34:01","modified_gmt":"2022-09-14T11:04:01","slug":"gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/","title":{"rendered":"Gratuity Rules: Eligibility, Calculation, Forfeiture, Income Tax, and Forms"},"content":{"rendered":"\n<p>Every company, public or private, having 10 or more employees is mandated to pay gratuity to its employees. Gratuity is paid as a sign of gratitude. In this article, let us discuss what gratuity is in detail. We will also cover eligibility, gratuity rules, forfeiture, tax rules and more.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#What-is-gratuity\" title=\"What is gratuity?\">What is gratuity?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#What-is-the-Payment-of-Gratuity-Act-1972\" title=\"What is the Payment of Gratuity Act, 1972?\">What is the Payment of Gratuity Act, 1972?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#What-are-the-gratuity-eligibility-criteria\" title=\"What are the gratuity eligibility criteria?\">What are the gratuity eligibility criteria?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#How-is-gratuity-calculated\" title=\"How is gratuity calculated?\">How is gratuity calculated?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Steps-of-gratuity-payment\" title=\"Steps of gratuity payment\">Steps of gratuity payment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Calculation-of-gratuity-in-case-of-an-employees-death\" title=\"Calculation of gratuity in case of an employee\u2019s death\">Calculation of gratuity in case of an employee\u2019s death<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#What-is-forfeiture-of-gratuity\" title=\"What is forfeiture of gratuity?\">What is forfeiture of gratuity?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#What-are-the-gratuity-rules\" title=\"What are the gratuity rules?\">What are the gratuity rules?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#New-gratuity-rules-2022\" title=\"New gratuity rules 2022\">New gratuity rules 2022<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Gratuity-payment-rules-in-India\" title=\"Gratuity payment rules in India\">Gratuity payment rules in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Payment-of-Gratuity-Act-1972-Rules-for-disputes\" title=\"Payment of Gratuity Act 1972 Rules for disputes\">Payment of Gratuity Act 1972 Rules for disputes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Latest-developments-regarding-gratuity\" title=\"Latest developments regarding gratuity\">Latest developments regarding gratuity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Income-tax-and-gratuity\" title=\"Income tax and gratuity\">Income tax and gratuity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Types-of-gratuity-forms\" title=\"Types of gratuity forms\">Types of gratuity forms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Frequently-asked-questions\" title=\"Frequently asked questions\">Frequently asked questions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#What-is-the-Gratuity-Act\" title=\"What is the Gratuity Act?\">What is the Gratuity Act?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#What-can-you-do-if-gratuity-is-not-paid\" title=\"What can you do if gratuity is not paid?\">What can you do if gratuity is not paid?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#How-to-add-a-nominee-for-gratuity\" title=\"How to add a nominee for gratuity?\">How to add a nominee for gratuity?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Can-a-company-pay-more-than-the-permissible-limit-as-gratuity-in-India\" title=\"Can a company pay more than the permissible limit as gratuity in India?\">Can a company pay more than the permissible limit as gratuity in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#What-is-the-penalty-for-a-delay-in-gratuity-in-India\" title=\"What is the penalty for a delay in gratuity in India?\">What is the penalty for a delay in gratuity in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#Can-you-get-a-gratuity-if-you-are-a-contract-employee-in-a-company\" title=\"Can you get a gratuity if you are a contract employee in a company?\">Can you get a gratuity if you are a contract employee in a company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.tickertape.in\/blog\/gratuity-rules-eligibility-calculation-forfeiture-income-tax-and-forms\/#How-is-gratuity-paid\" title=\"How is gratuity paid?\">How is gratuity paid?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-is-gratuity\"><\/span><strong>What is gratuity?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Gratuity is a monetary benefit paid by the employer under the Payment of Gratuity Act 1972 to their employees for services rendered in the company. It is part of the salary. However, gratuity is only paid to employees who render services for 5 yrs or more to a company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-is-the-Payment-of-Gratuity-Act-1972\"><\/span><strong>What is the Payment of Gratuity Act, 1972?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Payment of Gratuity Act, 1972, governs gratuity payments in India. As per this act, a company is liable to pay a one-time gratuity payment to its retired employees. The act applies to ports, railways, oilfields, shops, factories, and mines. The act is enforced to provide financial security to employees after retirement. It acts as security for employees who provide services to a company for a long time.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-are-the-gratuity-eligibility-criteria\"><\/span><strong>What are the gratuity eligibility criteria?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>An employee has to complete 5 yrs of continuous service in a company.<\/li><li>Gratuity is paid at the time of retirement except for certain conditions.<\/li><li>The employee should be eligible for superannuation.<\/li><li>Legal heir or nominee of an employee is eligible for gratuity in case of their passing or due to a disease or accident.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How-is-gratuity-calculated\"><\/span><strong>How is gratuity calculated?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Gratuity is a part of the cost to the company (<a href=\"https:\/\/www.tickertape.in\/blog\/difference-between-ctc-and-inhand-salary\/\">CTC<\/a>) of an employee. It is calculated based on the last drawn salary and years of service rendered by the employee. Following is the formula to calculate gratuity:<\/p>\n\n\n\n<p>Gratuity = (15 \u00d7 last drawn salary \u00d7 working tenure)\/30<\/p>\n\n\n\n<p><strong>Note:<\/strong><\/p>\n\n\n\n<ol><li>The amount of gratuity should not exceed Rs. 20 lakh. However, an employer can pay more than this limit; it will be termed as ex-gratia.<\/li><li>The number of months in the last year of employment in excess of six is rounded off to the next number. The number of months below six is rounded off to the previous lower number.<\/li><li>An organisation can pay gratuity even if it is not covered under the Act. The calculation of gratuity is based on the employee\u2019s half-month salary for every completed year. The salary includes basic salary, <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-dearness-allowance\/\">dearness allowance<\/a>, and commission (sales-based).<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Steps-of-gratuity-payment\"><\/span><strong>Steps of gratuity payment<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The payment of gratuity involves three steps:<\/p>\n\n\n\n<ol><li>An employee or an authorised person should send an application to their employer claiming gratuity<\/li><li>The company calculates the gratuity amount and notifies the same to applicant and the controlling authority<\/li><li>The employer has 30 days to pay gratuity to the applicant<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculation-of-gratuity-in-case-of-an-employees-death\"><\/span><strong>Calculation of gratuity in case of an employee\u2019s death<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In this case, gratuity is calculated based on the employee\u2019s tenure of service, but the amount cannot be more than Rs. 20 lakh. The following table shows the rates at which the gratuity will be payable in case of death of an employee:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Tenure of service<\/strong><\/td><td><strong>Gratuity payable<\/strong><\/td><\/tr><tr><td>Less than a year<\/td><td>2 x basic salary<\/td><\/tr><tr><td>1 yr or more but less than 5 yrs<\/td><td>6 x basic salary<\/td><\/tr><tr><td>5 yrs or more but less than 11 yrs<\/td><td>12 x basic salary<\/td><\/tr><tr><td>11 yrs or more but less than 20 yrs<\/td><td>20 x basic salary<\/td><\/tr><tr><td>20 yrs or more<\/td><td>Half the basic salary for each completed six-monthly period subject to a maximum of 33x of the basic salary<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-is-forfeiture-of-gratuity\"><\/span><strong>What is forfeiture of gratuity?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 4 of the Gratuity Act permits an employer to withhold paying gratuity to an employee in case:<\/p>\n\n\n\n<ul><li>The employee is terminated due to negligence or wilful omission, damaging the e employer\u2019s property. The forfeited sum is based on the extent of the damage done.<\/li><li>The employee is terminated due to immoral behaviour, misconduct or other violent acts.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-are-the-gratuity-rules\"><\/span><strong>What are the gratuity rules?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following are the gratuity rules in India:<\/p>\n\n\n\n<ol><li>Gratuity is payable by a company that has 10 or more employees on a single day in the previous 12 months. Even if the number of employees reduces to below 10, the company will be liable to pay the gratuity as per the Act.<\/li><li>Gratuity is payable only if employees serve the company for at least 5 yrs. However, this condition doesn&#8217;t apply in situations like the employee&#8217;s death or disablement.<\/li><li>Calculation of the gratuity is covered under the act. We will discuss the calculation in a while.\u00a0<\/li><li>Generally, gratuity is paid after retirement. However, there are exceptions to this rule:<ol><li>Employees can ask for gratuity while switching jobs, provided they have completed 5 yrs of service in the company<\/li><li>On the passing of an employee while in service, an employer has to pay the gratuity to the nominee or legal heir<\/li><li>If an employee becomes disabled due to a disease or an accident, they are entitled to gratuity<\/li><li>Employees opting for <a href=\"https:\/\/www.tickertape.in\/blog\/voluntary-retirement-scheme-vrs\/\">VRS<\/a> are entitled to get gratuity<\/li><li>An employee terminated can claim gratuity but not in case of discontinuation, theft, fraud, rape, assault or molestation<\/li><\/ol><\/li><li>Gratuity paid to an employee&#8217;s legal heir or widow is <a href=\"https:\/\/www.tickertape.in\/blog\/exemptions-under-income-tax-act\/\">exempted from tax<\/a>.<\/li><li>Gratuity of up to Rs. 20 lakh paid by the organisation under the Payment of Gratuity Act, 1972, is exempt from tax. The gratuity paid under central, state, and local governments are exempt from tax as per Gratuity Rules 2021.<\/li><li>An employer is mandated to pay gratuity to their employees even when the company is under bankruptcy.<\/li><li>If a nominee is a minor, an Assistant Labour Commissioner will <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> the gratuity in a term deposit offered by a nationalised bank on their behalf in their name.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"New-gratuity-rules-2022\"><\/span><strong>New gratuity rules 2022<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>On 1st July 2022, the new labour law was implemented for all corporations and organisations. As per the new labour law, the provident fund, working hours, and in-hand salary have been reduced. Note the following highlights:<\/p>\n\n\n\n<ol><li>Organisations must ensure that 50% of employees&#8217; <a href=\"https:\/\/www.tickertape.in\/blog\/difference-between-ctc-and-inhand-salary\/\">Cost to the Company (CTC)<\/a> is basic pay, and the rest consists of allowances, overtime, and house rent. Allowances or exemptions paid in excess of 50% of the CTC will be treated as remuneration.<\/li><li>The restriction of the maximum basic pay to 50% of CTC increases the gratuity bonus to be paid to employees. The gratuity amount is calculated on a large salary base comprising basic pay and allowances.<\/li><li>Employees should be paid for working overtime &#8211; for 15 minutes or more.<\/li><li>The work capacity is a maximum of 48 hours<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Gratuity-payment-rules-in-India\"><\/span><strong>Gratuity payment rules in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>An eligible employee should apply for gratuity within 30 days from the payable date. In case of retirement or superannuation, they should apply before one month<\/li><li>An employer cannot reject an application submitted after 30 days if it was for a valid reason<\/li><li>An employer must fill in the payment date and amount within 15 days of receiving the application. Gratuity should be paid within 30 days of receiving the application<\/li><li>In case an employer rejects an application, they must mention the reason<\/li><li>An employer may request a witness or evidence if a nominee or a legal heir claims gratuity. They will accept the claim from the date of producing the evidence<\/li><li>The modes of gratuity payment are cash, cheque or demand draft<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Payment-of-Gratuity-Act-1972-Rules-for-disputes\"><\/span><strong>Payment of Gratuity Act 1972 Rules for disputes<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An employee, legal heir or a nominee can file a complaint to the Assistant Labour Commissioner in case:<\/p>\n\n\n\n<ul><li>The gratuity payable is less than what an employee feels eligible to receive<\/li><li>If an employer rejects the gratuity payment application<\/li><li>An employee fails to pay the gratuity or specify the payable amount to an eligible claimant within the prescribed time<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Latest-developments-regarding-gratuity\"><\/span><strong>Latest developments regarding gratuity<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For private-sector employees, the ceiling tax exemption of gratuity amount has been raised to Rs. 20 lakh from Rs. 10 lakh. The same was implemented for central government employees after the implementation of the 7th Central Pay Commission.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Income-tax-and-gratuity\"><\/span><strong>Income tax and gratuity<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>Gratuity received by public sector employees apart from statutory corporations is exempt from tax.<\/li><li>For employees getting gratuity from an employer not covered under the Payment of Gratuity Act, the least of the below is exempted from the tax:<\/li><\/ol>\n\n\n\n<ul><li>Rs. 10 lakh<\/li><li>Actual gratuity got by an employee<\/li><li>Half-month salary of every year that an employee has completed<\/li><\/ul>\n\n\n\n<ol start=\"3\"><li>For employees getting gratuity from an employer covered by the Payment of Gratuity Act, the salary of 15 days as per the last drawn salary is exempt<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types-of-gratuity-forms\"><\/span><strong>Types of gratuity forms<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li><strong>Form I:<\/strong> to apply for gratuity payment<\/li><li><strong>Form J:<\/strong> to be used by a nominee for gratuity payment application<\/li><li><strong>Form K:<\/strong> to be used by a legal heir<\/li><li><strong>Form F:<\/strong> to put in a nominee<\/li><li><strong>Form G:<\/strong> to add in a fresh nominee<\/li><li><strong>Form H:<\/strong> to modify the nomination<\/li><li><strong>Form L:<\/strong> issued by the employer to the employee mentioning the date and the amount<\/li><li><strong>Form M:<\/strong> issued by the employer to the employee mentioning the reason behind the rejection of gratuity<\/li><li><strong>Form N:<\/strong> used by an employee to send an application to the labour commission<\/li><li><strong>Form O:<\/strong> issued by the concerned authority requesting an appearance for a case hearing<\/li><li><strong>Form P:<\/strong> summons issued by the concerned authority to be present for the case hearing<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently-asked-questions\"><\/span><strong>Frequently asked questions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1663150212056\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What-is-the-Gratuity-Act\"><\/span><strong>What is the Gratuity Act?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The Payment of Gratuity Act, 1972, governs gratuity payments in India. The act lays down the rules of eligibility for companies and employees, calculation of gratuity, application of gratuity claim, and more.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663150220831\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What-can-you-do-if-gratuity-is-not-paid\"><\/span><strong>What can you do if gratuity is not paid?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>You can send a legal notice to your employer to pay the gratuity amount. If you still don&#8217;t receive it, you can approach the labour commissioner&#8217;s office.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663150237132\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"How-to-add-a-nominee-for-gratuity\"><\/span><strong>How to add a nominee for gratuity?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Employees are required to fill in Form F when joining a company. This will allow them to nominate one or more heirs for the gratuity.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663150242773\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Can-a-company-pay-more-than-the-permissible-limit-as-gratuity-in-India\"><\/span><strong>Can a company pay more than the permissible limit as gratuity in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes. A company can pay more gratuity under ex-gratia or bonus.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663150254966\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What-is-the-penalty-for-a-delay-in-gratuity-in-India\"><\/span><strong>What is the penalty for a delay in gratuity in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>In case of delay in the payment of gratuity, the employer has to pay simple interest on the amount throughout the period of delay.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663150269400\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Can-you-get-a-gratuity-if-you-are-a-contract-employee-in-a-company\"><\/span><strong>Can you get a gratuity if you are a contract employee in a company?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>If you are a contract employee in a company, and the contract is separate from the entity, you are eligible to receive gratuity from the contractor, not the company.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663150285246\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"How-is-gratuity-paid\"><\/span><strong>How is gratuity paid?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>There are three modes of payment. Gratuity is paid in cash, cheque or demand draft.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gratuity is a monetary benefit an eligible employer pays their employees under the Payment of Gratuity Act. Read gratuity rules, eligibility, calculation and more here.<\/p>\n","protected":false},"author":27,"featured_media":10184,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[1739],"tags":[],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2022\/09\/8-Sep-22-Gratuity-rules-in-India.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/10182"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=10182"}],"version-history":[{"count":3,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/10182\/revisions"}],"predecessor-version":[{"id":10196,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/10182\/revisions\/10196"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/10184"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=10182"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=10182"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=10182"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}