Question 1

My payslip does not show basic and DA separately. What do I do?

Accepted Answer

Say so on the form and it will use the wage you gave as an upper bound instead of a verdict. Gratuity runs on basic plus dearness allowance only, and basic is smaller than gross, so the figure computed on gross is the most the Act could ever require. If you were paid at least that much, no basic pay can make the payment short. If you were paid less, the page will say it cannot tell, because it genuinely cannot. Your basic is on the payslip, in the Form 16 salary annexure, or in the appointment letter.

Question 2

I served 4 years and 10 months. Am I owed nothing?

Accepted Answer

Under the Act as written, nothing. Section 4(1) makes gratuity payable after five years of continuous service, and below that the amount is nil rather than reduced. Death and disablement are the exceptions. There is a second argument: section 2A(2) deems a year of continuous service where the employee actually worked 240 days in the preceding twelve months, and several High Court decisions have read four years and 240 days as satisfying the condition. It turns on days actually worked, which no document on this page shows, so we flag it rather than decide it.

Question 3

They paid me less than this page says. What can I do?

Accepted Answer

Ask in writing first, naming which step you disagree with - the wage, the divisor, or the years counted. The recomputation above gives you all three. If that fails, section 7(4) sends a disputed amount to the Controlling Authority appointed for your area, who hears both sides and directs payment, and the employer must deposit what they admit is due meanwhile. Section 7(3) also required payment within thirty days of the day it became payable, and section 7(3A) makes simple interest payable for any delay.

Question 4

Can my employer legitimately pay less than the Act says?

Accepted Answer

In two situations. The ceiling caps what is payable however long you served, so a long career can end with a figure smaller than the formula. And section 4(6) allows forfeiture: to the extent of the loss where services were terminated for wilful damage to the employer’s property, and wholly or partly where they were terminated for riotous or disorderly conduct or an offence involving moral turpitude committed during employment. Resigning, joining a competitor, or serving short notice is not on that list.

Question 5

Does my last working day count as a day of service?

Accepted Answer

Yes, and so does the day you joined. Joining on 1 June 2015 and leaving on 31 May 2020 is five years of service. Subtracting one date from the other gives four years, eleven months and thirty days, which fails the five-year condition and turns a real gratuity into nil. This page counts both days, which is why it asks for the dates rather than for a number of years.

Question 6

My employer paid more than the Act requires. Is the extra taxable?

Accepted Answer

Yes. Section 10(10) exempts the least of three figures: the notified limit of ₹20,00,000, what the Act made payable, and what you actually received. So the ordinary case is fully exempt and only the generous part is taxable, as salary income in the year you receive it. Note that the ₹20 lakh in the Act and the ₹20 lakh in section 10(10) are two different rules that happen to carry the same figure today.

Gratuity Payment Check