Gratuity is a lump sum amount given by an employer to their employee as a token of appreciation. Under the Payment of Gratuity Act 1972, an employee is eligible to get the gratuity once they complete their five years of continuous service with a single employer. It is not a part of the regular salary. As per the law, if a company has 10 or more employees, it must give gratuity. In case of death or disability of an employee, the 5-year continuation service condition is not required.
Is gratuity taxable?
Gratuity for government employees is tax-free; however, it is taxable for private employees if the amount is more than Rs 20 lakh.
Can an employer deny gratuity?
No, it is a legal right of an employee.
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