Gratuity part of fixed salary, deducted by employer but not paid

In your case, where gratuity has been deducted from your monthly salary, the amount should not be considered as statutory gratuity under the Payment of Gratuity Act, 1972, unless explicitly stated in your contract. Statutory gratuity is a lump sum payment due to an employee after five years of service, and it is separate from monthly salary.

If your employer has deducted this as "ex-gratia," it should still be paid upon your exit. You are entitled to receive it as per statutory provisions, and the deduction from salary does not negate this right.

For this technical matter, it is advised to consult a lawyer with expertise in labor law.

For any guidance, feel free to reach out at- prachi@lawfinitysolutions.com or https://wa.me/+919810483059. 

Thanks for the reply but the employer has mentioned as Gratuity and has shown the breakup as below.

This amount is included in Fixed compensation part.

There is no  provision in the Payment of Gratuity Act enabling the employer to make deduction from salary for grant of gratuity in the future.

The statement attached shows CTC (Cost to the Company) than salary. CTC is beyond the scope of labour/employment laws in our country.

Though gratuity was provided in your service, it is payable only after completing the minimum period of 5 years as per gratuity act section 4.Therefore your graatuity amount is not payable since you have not completed the requisite period of five years.

An employer cannot deduct any amount from an employee's salary for the payment of future gratuity. Gratuity is a one-time, tax-free payment that an employer gives to an employee for their long service and contribution to the company. It is not part of an employee's regular monthly salary.

Section 40A(7) : Provision for Payment of Gratuity No deduction shall be allowed in respect of provision made by the assessee for payment of gratuity to his employees. Provision for gratuity fund for meeting liability of gratuity in future liability is deductible only if gratuity fund is an approved gratuity fund.

Dear All Learned Experts,

First of all the employer is showing the deduction from Fixed Salary Component not from the Overall CTC. The overall CTC compnent includes performance payment as well. 

Here income tax act is not helping me anywhere. 

My query is simple ...Can I legally claim the amount considering the Contract Act, Gratuity Act and any other act. 

will be helpful if a more detailed analysis along with any relevant judgement is posted which can help my situation.

Basically deduction of any amount from your salary on account of "gratuity" is illegal and invalid as opined and advised by experts herein above.

CTC is not necessarily "gross salary", and,  in many respects, it is a fiction beyond the reach of concepts known to law. 

Can I legally claim the amount deducted as Gratuity from my salary in my case. Any case laws / judement / legal provisions which I can refer to ?

First of all ascertain if the amount towards gratuity was actually deducted from your salary, if yes then it is illegal as per provisions of gratuity act.

You can claim return of the amount illegally deducted from your salary on the false pretext of gratuity.

The employer is liable to pay gratuity to the eligible employees as per gratuity act without deducting any amount from the salary of it's employees.

You don't require any judgement to claim back your rightful amount, just send a legal notice demanding return of the deducted amount.

After that you can escalate the matter through court of law if necessity arises.