Retirement Gratuity Calculation In India

Retirement Gratuity Calculation In India is a retirement benefit scheme given to the employee who will complete minimum 5 years of service in an establishment. Gratuity act 1972 will be applicable for every organization which employs more than 10 employees. Here you can know complete details about payment of gratuity act 1972 calculation & how to calculate gratuity after 5 years.

Gratuity will be paid to the employees who will complete  a minimum of 5 years of service. But in death cases the nominees of employee will get gratuity even before 5 years of service.

Gratuity Calculation Formula :

(Basic Salary +DA) x 15 x No. Of  Years Of Service/26

Important Points In Gratuity Act 1972

Gratuity will be paid only after termination of job i.e whenever employee retires from his / her job or whenever he leaves the establishment.

Gratuity amount which employer pays to the employee is non taxable, so there is no tax deduction on gratuity amount.

If gratuity amount is more than 20 lakhs then that amount is taxable. Till now the non tax-ability gratuity limit for private sector employees is 10 lakh rupees, but as per this latest gratuity limit 20 lakhs notification, the gratuity limit for private sector employees is increased to 20 lakhs. In case of government sector employees, this limit is fixed to 20 lakhs.

Retirement Gratuity Calculation With Example Employees

Suppose an employee basic salary is 6000 Rs and he completes a continuous service of 6 years in an establishment then the amount of gratuity he will get will be calculated on below gratuity calculation formula.

Gratuity = 6000 x 15 x 6 / 26 = 20769 Rs

Sample Filled Gratuity Form F (Or) How To Fill Gratuity Form F

Sample Filled Gratuity Form F : Learn how to fill gratuity form F and download gratuity form F. Gratuity form  F will be filled up during joining date of employee and it is one of the important document to be included in joining check list of every organization.

Download Gratuity Nomination Form F

Gratuity Form F  will be known as nomination form, it contains 3 pages:

On first page of gratuity nomination form F the detail like establishment details, employee name and nominee details have to be filled.

On second page of gratuity nomination form  F consists employee details, employee signature, witnesses signature and employer signature are required.

On Third page acknowledgement signature of employee is required.

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