Calculations to make the work easier.....
What is meant by Gratuity?
Gratuity refers to an amount of money which an employer pays to his employee in return for services offered by him to the company. However, only those employees who have been employed in the company for five years or more than five years are given a gratuity. You may perceive gratuity like gratitude expressed by the company towards their employees for their services. It is governed by the Payment of Gratuity Act 1972.
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What is the formula for calculating the amount of Gratuity?
The government employee who is eligible for gratuity The amount of gratuity received by any government employee (whether central/state/local authority) will be exempt from income tax. Any other eligible employee whose employer is covered under Payment of Gratuity Act, In this case, the last drawn salary of only fifteen days will be exempt from income tax.