The Payment of Gratuity Act, 1972 with Expertise
Welcome to SGCMS, your trusted partner for specialized services related to The Payment of Gratuity Act, 1972. Our comprehensive solutions are designed to guide your organization through the intricacies of this important legislation, ensuring fair gratuity practices, compliance, and employee well-being.
The Payment of Gratuity Act, 1972 serves as a retirement benefit, as it disburses the accumulated amount to employees after their retirement. In a specific case, the Supreme Court of India referenced the Gratuity Act, affirming that employees are eligible to claim retirement benefits after a specified duration of service with a particular company. The Indian Parliament enacted the Payment of Gratuity Act, 1972 on August 21, 1972.
Who Is Eligible Under The Gratuity Act?
As per the decision of the Supreme Court of India, the payment of gratuity to the Employee is mandatory, once the Employee has served the establishment for at least 5 (Five) Years. An Employee becomes eligible to claim his Gratuity under the Gratuity Act when he leaves the Establishment. The reason for leaving may be resignation or retirement or can even be due to any medical condition caused by diseases of accidents and death.
Exception to the Rule: the criteria of completing the service of 5 years is not mandatory if, the cause of the termination of employment is (i) death of the Employee or; (ii) any disability due to diseases or accidents, making the Employee incapable of continuing the Services.
Calculation Made Under The Payment Of Gratuity Act, 1972
Section 4(2) of the Gratuity Act, 1972 provides for a fixed formula to calculate the amount of Gratuity to be paid. However, under Section 4 (3) of the Gratuity Act, the maximum amount of Gratuity to be paid by the Establishment is fixed at Rs. 10,00,000/-.
Formula For Calculating Gratuity:
{(Basic salary + D.A) x 15 days x No. of years of service} / 26
Role of SGC Management Services Pvt. Ltd.
Being India's leading HR and Payroll service provider, we at SGC Management Pvt. Ltd. provide the best service and assistance along with a dedicated expert Consultant, who will ensure that you that all the compliances are made in accordance with the Payment of Gratuity Act, 1972.
Below is the list of service provided by us: -
- Maintenance of following records and documents:
- Notice of opening under Form A
- Declaration under Form-F
- Any other records and registers, as may be applicable under law, from time to time.
- Proper and correct calculation of the gratuity amount, for the eligible Employees.
- Assistance with payment of the amount under the pPayment of Ggratuity Aact, 1972.
- Providing updated records and data during inspection under the Payment of Gratuity Act, 1972
- Regularly updated and inform the employer about amendment/ changes in the Payment of Gratuity Act, 1972.
Get a 360-degree solution regarding all kind of roles and responsibilities on HR and Payroll process with the most trusted service from SGC Management Services Pvt. Ltd.