Payment of Gratuity Under Gratuity Act, 1972

Payment of Gratuity Under Gratuity Act, 1972 and
Bipartite Settlement / OSR In Banks after 10BPS

You can Calculate here Gratuity payable under Gratuity Act, 1972 & BPS / OSR

Gratuity in the Banks is payable to employees and officers both under the Gratuity Act, 1972 as well as under the provisions of our Bipartite Settlement for employees and as per OSR for officers whichever is higher.

(other than in SBI where Gratuity is paid only under the Act with a ceiling of Rs. 10 lacs)

Eligibility :

As per Bipartite Settlement
On retirement on superannuation
On resignation after 10 years' service
On termination of service
On becoming incapacitated
On the death of an employee
As per Gratuity Act
On retirement on superannuation
On resignation after 5 years' service
On disablement
On death of an employee

Eligible Amount:

As per Bipartite Settlement / OSR
One month Pay for each completed year of service (Max. 15 months) plus half month Pay for each year beyond 30 years' service (No maximum) Pay means - Average of Basic pay, Spl. Pay*, Spl. Allowance*, Offg. Pay*, PQP, increment component of FPP payable during the twelve months next preceding death,disability,retirement,resignation or termination as the case may be. * (only that portion ranks for superannuation benefits in case of workmen employees) Explanation Gratuity is to be calculated under Bipartite Settlement on the basis of average of pay "payable" during the last 12 months of service and not on hte basis of average of the pay "paid" during the last 12 months of service. For officers, last drawn pay as on the date of cessation to be taken into a/c. For service of six months and above, in the case of more than 30 years of service, gratuity shall be calculated on pro rata basis. Service of less than six months should not be taken into a/c in both the cases
As per Gratuity Act
15 Days wage x No. of years of service ( Max. Rs. 10 lacs) Wage means last drawn Basic pay, Spl. Pay*, Spl. Allowance*, Offg. Pay*, PQP, DA, Increment portion of FPP. 1 day = monthly wage/26 days * (only that portion ranks for superannuation benefits in case of workmen employees)

The higher of the two in (a) i.e. Gratuity as per Act or (b) i.e. Gratuity as per OSR / BPS will be paid.

Gratuity Paid upto Rs. 10.00 lakhs is exempt from income tax under sec 10(10).

PAYMENT OF GRATUITY FROM 1.11.2012

• In terms of Section 4 (5) of the Payment of Gratuity Act, 1972, Gratuity under Gratuity Act or BPS provisions /OSR whichever is higher is payable.
• Hence for every retiring employee, Gratuity has to be re-calculated both under the Act and under BPS and higher of the two will be paid.
• For those employees who have retired from November, 2012, Gratuity will be re-calculated both under the Act and as per BPS / OSR and arrears/difference if any will be paid to them.