Difference between gratuity and superannuation
Ranveer
(Querist) 26 September 2011
This query is : Resolved
Can you please guide me about the exact difference between Gratuity and superannuation in detail
Sailesh Kumar Shah
(Expert) 26 September 2011
Main exact difference between Gratuity and superannuation :
Gratuity is statutory obligation by the employer under the payment of Gratuity Act, and nothing to pay by the employee. where superannuation is voluntary and employee have to pay.
Guest
(Expert) 26 September 2011
Dear Ranvir,
About superannuation, please clarify whether you want inormation on investor's terms or in terms of service conditions of the employee?
Guest
(Expert) 26 September 2011
Dear Shailesh,
You need to review your reply in so far as superannuation is concerned.
Ranveer
(Querist) 26 September 2011
Sir,query is in terms of service conditions of the employee.
Guest
(Expert) 26 September 2011
Dear Ranvir,
Gratuity denotes an amount, which is paid in one lump sum along with other due retirement/ terminal benefits by an organisation to an employee on retirement, resignation or termination of his services. It is at the rate of 15 days of wages/salary for each completed year of service. It is necessary to be paid to an employee, if he has rendered 5 years or more of service in an organisation.
On the other hand, superannuation means attainment of the maximum age of service, as fixed by an organisation for the retirement of the employee from active service, i.e., such an age fixed in the contract or conditions of service at which the employee shall vacate the employment. After that the organisation cannot retain the employee in its service.
So, as regards the retirement benefit on superannuation, it is an organizational pension program, also called Government's or company's pension plan, created by the Government or a company for the benefit of its employees, as a welfare measure, that it continues to pay to the employee after his retirement and till the end of his life, i.e., till death. Pension is not permissible in the case of resignation, termination, or dismissal from service, i.e., admissible only in case of retirement from service.
Hope you would have now understood the exact difference between the two terms.
prabhakar singh
(Expert) 26 September 2011
very exactly Mr. Dhingra has kept you informed about two terms which needs no more explanation.
