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I m working in Public Ltd. Company since 21st July-2006 and if i would like to resign from my post on 21st June-11 and give one month notice period to company and I decided that my last working day will be 21st july -11 so can i eligible for Gratuity ?? I would like to know that i was transferred from one division to other division from same company on 31st Jan-11. As per company policy, first I resigned on 31st jan-11 and re-join new division on 1st Feb-11 so can i eligible for gratuity
From India , Ahmadabad
Gratuity is a benefit received by an employee for services rendered to an organisation. For companies covered under the Gratuity Act, this benefit is paid when an employee completes five or more years of service with the employer. An employee gets gratuity when he/she resigns, retires or is laid off. In case of death or disablement there is no minimum eligibility period.
How Gratuity is Calculate
The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26.
According to this formula, the time period of over six months or more is considered as one year.
This means if you have completed five years and seven months of service, the number of years would be considered as six years for calculation of gratuity benefit.
On the other hand, if the service period is five years and five months, for gratuity calculation it will be considered five years.
An employer can however give higher gratuity than the amount under the prescribed formula.
Income Tax Treatment of Gratuity
For government employees, entire amount of gratuity received on retirement or death is currently exempted from income tax.
In case of non-government employees, income tax rules on gratuity are applicable depending on whether employees are covered under the Payment of Gratuity Act, 1972 or not.

From India,
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