Frequently Asked Questions
To claim gratuity, you typically need to fill out a Form I and submit it to your employer. The employer is required to pay the gratuity within 30 days of it becoming payable.
If an employer refuses to pay, you can file a complaint with the Controlling Authority under the Gratuity Act, which is typically the Labour Commissioner’s office in your region.
Yes, gratuity is a crucial component of your full and final settlement, which is the total payment you receive from an employer upon leaving the company.
The Gratuity Act applies to “employees” in general. However, contract employees often have specific terms in their contracts. It’s best to check your contract and the company’s gratuity policy.
No, there are tax exemption rules. For private sector employees, the least of these three amounts is tax-exempt: 1) ₹ 20 Lakhs, 2) The actual gratuity received, or 3) A calculation based on a specific formula.
The Act specifies “last drawn salary.” Therefore, only the combined Basic Salary and DA from the last month of your service are used for the calculation.
The 15/26 formula is specifically for employees covered under the Payment of Gratuity Act, 1972. Employees of some educational institutions or those in companies not covered by the Act may have gratuity calculated differently.
