Tds on gratuity payment if service is less than 5 years

Ask them as to what they are paying you is Gratuity or not.

If gratuity, it is exempt as it does not form part of Total Income as per Section 10(10(ii) of the Income Tax Act, which says that :

(ii) any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extent it does not exceed an amount calculated in accordance with the provisions of sub-sections (2) and (3) of section 4 of that Act ; 

Respected Sir / Madam,

I have joined my current organization on 18-September-2013. After Serving complete notice period of 15 days as per my organization policy, my last working day would be 19-JULY-2018 As per records, I am completing 4 Years 10 Months 01 day Or Completing 4 Years & 301 Days. Now there is big discussion is going on for my Gratuity Claim Eligibility considering below points As per Gratuity Act, Gratuity can be claimed on completion of 5 years of uninterrupted services with sub clause of 4 years & 240 days or 4 years 10 months 18 days is also considered as eligibility. Now there is no clarification whether 240 days are only working days of service where holidays are weekly off are not counted. In our organization we have Sunday as weekly off - 6 days of working culture.   I have also come across about one Case Law of Madras high court (W.P No 2135 of 1987, Decided on 12.6.1996) which was filed by personnel manager of Mettur Beardsell Ltd Vs Regional Labour Commissioner (Central). As per judgment, decision was given in favour of applicant considering his continuous service of 4 years 10 months 18 days which is making him entitled for Gratuity claim considering Section 2A. Payment of Gratuity Act 1972. Now my question, if person has completed 4 years & 240 days but not completing 4 year 10 months 18 days terms, still person is eligible for Gratuity claim or not considering both terms (4 yrs & 240 days and 4 years 10 months 18 days) are independent hence meeting of any one of term is making person eligible for Gratuity Claim.  

Second Question, whether organization can exclude holidays and weekly off while calculating 240 days of uninterrupted service or not ?

Being subject matter expert, your kind assistance will help me also want to request for quick response. If anyone needs any supporting information to show my HR department for gratuity.

Please mail me,

Regards,

Rohit
 

E-Mail_Id: rohit@ajanra.com

The 240 days continuous service will include the holidays and weekly off.

Once this is answered, the other question of 4 years 10months and 18 days etc., has no relevance.

Am I eligible for gratuity since I have ccompleted 4 years 10 months 01 day or 4 Years and 301 Days (without LWP in my Service) Rohit,

Thanks and regards,

Rohit Handa

In my opinion you are not eligible for payment of gratuity as you have resigned from your duty on your own. the refered case of madras high court as cited above is different one. in that case management intentionally terminated services of employees before completion of 5 yrs to avoid payment of gratuity. therefore court gave verdict in favor of employees.