Gratuity calculation in India is made by employers based on a very easy method of calculation. Gratuity payment amount differs for each employee as it changed with last drawn salary, number of years of service .etc. This is why everyone is after Gratuity calculation software download for knowing about gratuity they will get on resigning or retiring. All companies who have more than 10 employees will have to pay gratuity compulsorily after their retirement period or getting resigned. In September 2017 Indian government under Prime Minister Narendra Modi decided to increase tax free limit on gratuity amounts for private employees to Rs.20 lakhs. Earlier gratuity ceiling limit was Rs.10 lakhs which was now increased to Rs.20 lakhs giving relief to private employees.
With implementation of 7th Central Pay Commission ceiling limit under CCS (Pension) Rules 1972 and Payment of gratuity Act was amended and new Payment of gratuity (Amendment bill) 2017 was submitted. With this new change ceiling limit of gratuity of private employees will be Rs.20 lakhs with effect from 1 January 2016 (1/1/2016).
Most common doubt is regarding salary that is taken into consideration for making Gratuity calculation. Basic Salary and Dearness Allowance are taken for gratuity calculation while HRA, bonus, special allowance .etc. will not be considered. What is Period of service that is taken for Gratuity Payment calculations ? You should have completed minimum 5 years or 4 years 6 months of service to become eligible to receive gratuity payment from a company or establishment in India.
How to calculate salary per day of an employee for this gratuity calculation. You have to divide your 1 month salary by 26 days to get salary per day. Another most inquired topic in Gratuity payment is regarding Formula of Gratuity Calculation. Salary of 15 days for every completed year will be given as gratuity. For example if you have 5 years service then your gratuity will be 1 day salary x 15 days.
What is amount taken as salary for calculating gratuity. It is Basic salary + Dearness Allowance DA.
Gratuity calculation Formula = Number of years of service x Last drawn salary for 15 days
[ (Basic Pay + D.A) x 15 days x No. of years of service ] / 26
Excel sheets, Online Gratuity calculation software download .etc.
Based on Gratuity Payment of Gratuity Act 1972 and Payment of gratuity amendment bill 2017 there are few Gratuity calculation software download available. Most demand is for excel based calculators, online calculators and few mobile apps that make it easy to do gratuity calculation.
Gratuity calculator Excel format – https://docs.google.com/spreadsheets/d/1Z1uaIL91U4f97fsLnE2sFnNUHfxWbykWTfY1fLzL5vY/export
Online calculator for gratuity in India at http://www.moneycontrol.com/personal-finance/tools/gratuity-calculator.html
Indian Prime Minister Narendra Modi in it’s first cabinet meeting after reshuffle of Union ministers took decision to introduce Payment of Gratuity (Amendment) Bill, 2017 in Parliament. By amending Payment of Gratuity Act 1972 a new bill named Payment of gratuity (Amendment bill) 2017 will be passed by Cabinet in Parliament and made into a law.
All employees who have a service period of 5 years are eligible to get gratuity payment. Tax concession is available by a tax free limit of Rs.20 lakhs on gratuity payment.