Friday, March 5, 2010
Gratuity ceiling hiked appreciably!
The Cabinet has approved an amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh to Rs 10 lakh. The Bill to amend the Act will now go to Parliament as told by government officials.
Every salaried person, who has completed five years of government or private sector service, is eligible for half a month's salary as gratuity for every completed year of service. But the gratuity pay of those with higher salaries is now limited at Rs 3.5 lakh. The proposed amendment raises this to Rs 10 lakh.
Every employer with more than ten salaried workers is bound to provide gratuity to the eligible employees. Many companies, however, do not keep the gratuity liability adequately funded. That is, they make provisions for future payment, but do not set aside funds towards the future payment. Listed companies are expected to disclose their gratuity liability.
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Can i encash my gratuty if i move from the sister concern organization to the main branch after 5 years of total work period including both the concerns
Gratuity can only be encashed if there has been final settlement with the organization. Please note if you move from sister concern organization to main organization, and if your employment is considered to be continous(i.e. if you work in org b for 5 years and then move to Org A, without any final settlement then you cannot encash the gratuity.