Gratuity Calculator India 2020: This Gratuity formula will help you earn more money; here is how

Gratuity Calculator India 2020: Gratuity refers to an amount of money, which an employer pays to employees in return for services offered to the company. However, only those employees who have been employed in the company for five years or more than five years are given gratuity. You may perceive gratuity like gratitude expressed by the company towards their employees for their services. In India, gratuity is governed by the Payment of Gratuity Act 1972. However, like any other calculator, Gratuity calculator works differently. As per the Payment of Gratuity Act 1972, one will get gratuity of one year for every six month service in a particular financial year. Means, if one has worked for 5 year and six months, he or she is eligible for the Gratuity payment of six years

On how does the gratuity calculator work, Jitendra Solanki, a SEBI registered tax and investment expert said, "Gratuity Calculator India is governed under the Payment of Gratuity Act, 1972 that is also known as the Gratuity act 1972. Section 4(2) of the Payment of Gratuity Act says that for every completed year of service in excess of six months, the employer shall pay gratuity to an employee for the entire year. That means if an employee works in the establishment for more than 6 months in a year, he shall be eligible to get gratuity at the prescribed rate." So, if an employee has giver regular service to an establishment for five years and six months, he or she will get Gratuity for the whole six years.

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Solanki said that Gratuity is an important part of one's income as it is mandatory investment of an employees which is governed by the government institution to respect and ensure loyalty payment of the employee. Asked about the eligibility criteria for the gratuity payments Solanki listed out the following:

1] The employee should be eligible for superannuation;

2] The employee should have retired from the job;

3] The employee should have resigned after remaining employed for 5 years with the company; and

4] In the case of death of the employee, or if the emloyee become disabled on account of sickness or accident.