The Indian government can promptly announce wonderfully good news to the employed people. Notably, those working in the private sector will benefit significantly from this move of the government. It is reported that the government is preparing to change the rules of Social Security and Gratuity.
To be eligible for the gratuity, an employee has to work for at least 5 consecutive years in a company. But by transforming this, the government is preparing to offer relief to the ordinary working people.
Currently, gratuities are available on a job of 5 years. But according to media reports, the Indian government wants to cut the time frame for a gratuity to one year. It is stated that the government may introduce a bill related to it in the coming winter session of Parliament. Allow me to inform you, the people who resign their jobs more often will be a prime beneficiary of this change. After the modern rule, they will get the gratuity if they change jobs after a year.
However, no official announcement has been issued to this rule of the government so far. But, the time limit of a gratuity obtain 5 years now. A gratuity represents a type of amount received by employees, which provides secondary benefits to the employees.
What is a gratuity? The gratuity is given by the company to its employees. In a way, it is expressed by providing the employee in return for the service given to the company. Its maximum limit remains 20 lakh rupees. However, in the case of death or disability, it is unnecessary to complete 5 years of the job to be given a gratuity amount. For the employer, there is a gratuity within 30 days of the leave of the employee, retirements, death, or disablement. If this does not happen within the specified period, then later, the employer will have to pay the gratuity amount along with the interest which is fixed by the government.
How much gratuity an employee will get depends on two factors? To begin with, how many years did you serve in the company? Second, based on your last salary. Therein, the calculation is performed according to the 15 days of the last salary of every year of service. Employer's basic and dearness allowance is included in the salary. The gratuity fixation formula is 15 x last salary x years of service/26.
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