Typically Gratuity would be payable to an employee if he/she has served at least 5 full years in a company. Most companies deduct about 4.81% of the basic salary towards Gratuity deductions.
So sometimes it makes sense to leave the company after completing 5 years if you are closing in on 5 years!
The value is calculated based on the following formula:
Gratuity payable = (Last drawn basic wage X 15 X No. Of years of service)/26
There are quite a few calculators available on line.
http://ndtvprofit.com/Calculators/gratuity.htm
is a good one.
AFAIK, up to ten lakhs of Gratuity is tax free. Not sure if things are changing in the new tax code getting implemented from 2012.
So sometimes it makes sense to leave the company after completing 5 years if you are closing in on 5 years!
The value is calculated based on the following formula:
Gratuity payable = (Last drawn basic wage X 15 X No. Of years of service)/26
There are quite a few calculators available on line.
http://ndtvprofit.com/Calculators/gratuity.htm
is a good one.
AFAIK, up to ten lakhs of Gratuity is tax free. Not sure if things are changing in the new tax code getting implemented from 2012.
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Gratuity fund services includes advisory services as well as day to day maintenance of Gratuity Trust accounts & administration.
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