Gratuity plays an important role in securing the future of people with jobs

HIGHLIGHTS: Gratuity benefits for at least 5 years of continuous work. According to the current provisions, funds are available up to 20 lakh rupees.

It is not easy for the employed people to collect certain amount of money for the future. A person spends the entire amount of money earned in his lifetime. Keeping this in mind, the Central Government passed the Payment of Gratuity Act, 1972 in 1972. At the time of passage, the Act was applicable to the whole of India except Jammu and Kashmir. Now the people of Jammu and Kashmir also get its benefit.

They get the benefit of gratuity

According to the Payment of Gratuity Act-1972, a certain amount of money is given to the employed persons for not being able to do the job due to retirement or illness. This money is given by the employer with whom the person was working. That is, a person works for at least five years in a registered company and for some reason he does not continue the job, then he will be entitled to get a fixed amount of gratuity from his employer.

The purpose is to make the future safe

The purpose of this Act is to provide a certain amount of money to the working people in the future, so that the future of those persons can be secured and the old age of the person can be better passed. That is, when the body of a working person is not working and is not in a position to do any work, in such a situation, a certain amount of money should be provided by the employer to spend his life. The Act states that if a person has spent his entire life for an employer and has spent the long period of his life for an employer, the future of such person also becomes the responsibility of that employer.

The Payment of Gratuity Act applies to these organizations

The Payment of Gratuity Act has been applied to any organization or organization of more than 10 employees. Provision has also been made to impose penalty on employers for non-payment of gratuity. The Act applies to both government and private entities. Section 2 of the Act states that all such factories, mines, plantations, shops and all government-non-governmental organizations in which more than 10 employees are employed, this Act will apply.

Gratuity will be up to 20 lakh rupees

As per the old provisions of the Payment of Gratuity Act, gratuity was up to 10 lakh rupees. But after the amendment in 2018, this limit has been increased to Rs 20 lakh. Now, according to the existing provisions, gratuity can be up to 20 lakh rupees. Under Section 4 of the Act, employees who have served continuously for more than 5 years, after which they are unable to work due to resignation, retirement or disability, or if they have died, then in such a situation, the employee will be awarded a gratuity. Will be paid The gratuity of the person who dies will be paid to their heirs.

This is how gratuity is calculated

According to the Payment of Gratuity Act, gratuity will be calculated by multiplying the years of work by assuming the salary of the fifteen days of the basic salary of the last month of service as an average. The gratuity is calculated (15 X previous salary X working period) from the Part 26 formula. The previous salary includes basic salary, expensive allowance and commission on sales. Suppose a person's previous salary is Rs 50,000 a month. He worked in a company for 15 years and 8 months. In such a case, his gratuity will be (15 X 50,000 X 16) / 26 = 4.61 lakh rupees. In this case, it has been taken as 16 working days being 15 years 8 months. If the working days were 15 years and 5 months, then it would be considered as 15 years.

Application has to be done within 30 days

The employer has been given 30 days to pay the gratuity under the Time Period Act. The employer should make the payment within a period of 30 days from the day the employee submits the application for payment of the gratuity. If he is unable to pay the gratuity during this period, he will have to pay a fixed rate of interest to the employee for the delay. If an employee does not pay the gratuity or refrains from paying, he can be punished with imprisonment for 6 months.

Source: Web