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Gratuity Elegibility
#11
Dear Mr. Negi,

I have one question each regarding Gratuity and PF.

First gratuity related question->
After working for a company (say ABC) for almost 3 years, i resigned. They gave me the gratuity amount as Ex-gratia after deducting the applicable tax. I then joined another company (say XYZ) where i worked only for 10 months. When I asked them to give gratuity after deducting the taxes, they said that it can be given only if I complete 5 years.

So, i have 3 questions here:
1) Everywhere we read that gratuity is payable only after completing 5 years ( 4 months and 240 days to be precise), then why did my first company give the gratuity?
2) If the first company gave gratuity as Ex-gratia even before completing 5 years, why can't the second company do the same?
3) if the second company is not giving the gratuity, who becomes the owner of my gratuity accumulated during the 10 months? The company XYZ or the government? (Here i would mention that HR of my second company told that they deposit the gratuity with LIC- Life Insurance Corporation)

Now the PF related question->
If someone is working in a company for more than 5 years, can he withdraw his PF amount (not loan against PF) without any Tax deduction (even if he continues to work with the same company)
 
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#12
Dear Govind ,

One of my friend joined HP on Oct-17th-2012. I would like to know
1) by what calender date would he be eligible for Gratuity- Is it Oct-17th-2017 OR any date after April-17th-2017? ( for qualifying for gratuity is it 4 years 6 months OR 4 years 8 months)
He plans to resign and would like to know as to till what time he needs to continue without resigning in order to avail gratuity benefit?
Can he go on Leave of Absence for 2 or 3 months now and will this LOA will be considered as service for Gratuity OR will it not be considered?

Regards,
AK
 
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#13
Dear AK,

Please find below remarks.
1. If any employee completed their 4 years and 240 days (without LOA) then he/she is eligible for gratuity.
2. LOA will not consider in service.

Regards
Devinder Malik
Thanks & Regards

Devinder Malik | Human Resources & Admin
 
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#14
Dear Sunil,

Here are the answers of your query:

1. Gratuity is applicable if you have worked for 4 years 240 days. This is as per Gratuity Act. No Act stops employer to give more than mentioned in Act. Your first employer has paid you because they must this as their company policy. They could not pay it as Gratuity because you have not completed required number of years hence they paid it as Ex Gratia. Thats why they deducted tax on it otherwise Gratuity is no taxable upto Rs 10 Lakhs.

2.Second company is not bound to pay as per law. I have not seen many companies paying Ex Gratia.

3. Gratuity is only a liability till a employee completes 4 years 240 days. If your second company has deposited to LIC, till be there with LIC as part of policy and will not be paid to you.

PF Query:

No one can withdraw PF until employee stops working for ever.

Govind Singh Negi
HR Professional- Sr Management
Follow at twitter: @govindsinghneg3 https://twitter.com/govindsinghneg3
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#15
Hi Mr Negi,
I want to know the Gratuity eligibility for my case. I had join in one organisation on 02/08/2012 and submitted my resignation on 25/05/2017 and currently I am serving notice period till I completed 5 year . I am planning to quit on 04/08/2017, by that time I will complete my 5 year tenure . In my case am I eligible for Gratuity ???? Pl give your valuable inputs.
 
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#16
Dear Mr. Negi,
I had joined my current organisation on 02/08/2012 and Since then I am serving in the same company . After getting another offer now I am planning to switch over , So i submitted my resignation on 25/05/2017 and currently I am serving my notice period . I informed to my HR that my last working date would be 05/08/2017 . By that time I will complete 5 year in my current organisation . So in this scenario Am I eligible for Gratuity ??? Please provide your valuable inputs .
 
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#17
Dear Sunil,

1. you are eligible for Gratuity if you completed 5 year in the same organization and Ex-Gratia is voluntarily.in the first organization you got Ex-Gratia not Gratuity.

2. Refer 1st point.

3. LIC manage the fund for the employees who is leaving the org after completing 5 years of services or when they retire.

Regards,
Akhil

(02-08-2016, 06:23 PM)sunilk.nie@gmail.com Wrote: Dear Mr. Negi,

I have one question each regarding Gratuity and PF.

First gratuity related question->
After working for a company (say ABC) for almost 3 years, i resigned. They gave me the gratuity amount as Ex-gratia after deducting the applicable tax. I then joined another company (say XYZ) where i worked only for 10 months. When I asked them to give gratuity after deducting the taxes, they said that it can be given only if I complete 5 years.

So, i have 3 questions here:
1) Everywhere we read that gratuity is payable only after completing 5 years ( 4 months and 240 days to be precise), then why did my first company give the gratuity?
2) If the first company gave gratuity as Ex-gratia even before completing 5 years, why can't the second company do the same?
3) if the second company is not giving the gratuity, who becomes the owner of my gratuity accumulated during the 10 months? The company XYZ or the government? (Here i would mention that HR of my second company told that they deposit the gratuity with LIC- Life Insurance Corporation)

Now the PF related question->
If someone is working in a company for more than 5 years, can he withdraw his PF amount (not loan against PF) without any Tax deduction (even if he continues to work with the same company)
 
Reply
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