Why gratuity is given

The Gratuity Calculator would calculate the gratuity amount based on the formula for calculating the gratuity. A gratuity calculator is a tool which gives you an estimate of the amount that you would receive, on quitting the job, after rendering a continuous five years of service. It is a handy tool to calculate the gratuity on retirement from the company. You must enter the inputs of the last drawn salary and the tenure of continuous service with the company.

The last drawn salary includes your basic salary, the dearness allowance, and the commission that you have received from sales. The gratuity calculator would show you the gratuity figure in seconds.

It is simple to use and can be used any number of times. For example, you have worked with the XYZ company for a period of 15 years. Your last drawn basic salary along with dearness allowance was Rs 30, As per the Gratuity Act, the amount of gratuity cannot be more than Rs 20 lakh. Any excesses would be treated as ex-gratia. If the number of years you have worked in the last year of employment is more than six months, then it will be rounded to the nearest figure.

Suppose your tenure of service is 16 years 7 months, then you receive the gratuity for 17 years. Otherwise, its for 16 years if it happens to be 16 years 4 months. For example, you have a basic salary of Rs 30, You have rendered continuous service of 7 years and the employer is not covered under the Gratuity Act. The ClearTax Gratuity Calculator is an easy-to-use generic tool, where you enter the basic salary and the years of service.

It gives you an estimate of the gratuity you would receive, after five or more years of continuous service. The gratuity calculator shows you the gratuity figures in seconds. It helps you plan your finances by investing the gratuity in a smart manner, for a maximum return. Top performing investment plans, better than mutual funds. Plans with zero commissions. Gratuity: All You Wanted to Know. How does Gratuity Payment Work?

Gratuity Rules and Regulations. Eligibility Criteria for Receiving Gratuity. Gratuity can be received by the employee on the following criteria: The employee has to be eligible for superannuation The employee should have retired The employee must have resigned after completing 5 years with the same employer The employee dies or suffers with a disability caused due to an illness or accident.

Calculation of Gratuity. However, it should not exceed INR 10 lakhs. An amount above the cap of INR 10 lakhs is called ex-gratia. It is not imposed by the law and is a voluntary contribution. A time span of more than 6 months, of the last year of employment, is rounded off to the next number, while the time below 6 months is not; i. Gratuity calculator: The gratuity calculator tool in the following link can be used for calculating your gratuity. Source: www. Gratuity Forms.

Taxation Process of Gratuity. There are 2 main cases for the same: When a government employee receives the gratuity amount: If the employee works under the state or central government or local authority and receives gratuity, then his gratuity amount is fully exempt from income tax. Payment timeline: The three main steps of payment are as below Initiation: The employee must send the application to the employer w.

Here are the key highlights: As per Article 10 10 i of the Income Tax Act, gratuity that is received by government employees, besides statutory corporations, is fully exempt from tax. Key highlights about Gratuity : While receiving gratuity from an employer, if the amount exceeds INR 10,00,, then the tax exemption in this case is to be calculated based on the points highlighted under the taxation section above.

What is the maximum cap of receiving the gratuity? Can I nominate somebody to get my gratuity if I die? How long does it take for an employer to pay the gratuity amount? It has been 4. For more details, please also refer to the Legal Disclaimers provided on the Website. Financial Solutions. We may provide you with various money solutions and options which are generally available basis your investment profile or those which are generally held by persons of similar investment profile.

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