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Hi everyone, I'm Deepa Nair, working in Bangalore in an IT company. My salary is around ₹72k in hand. I'm planning to resign next month and my total tenure will be 4 years and 8 months. Everyone keeps telling me gratuity requires 5 completed years, so I won't get anything. But my HR is being vague about it and not giving a clear answer. Someone told me there's a Supreme Court ruling where 4 years 240 days also counts? I'm genuinely confused now. My basic salary is around ₹32k per month so the gratuity amount would be decent if I'm eligible. Is the 5 year rule strict or is there some exception? Also how exactly is gratuity calculated, like what's the formula? Has anyone actually received gratuity before 5 years or fought for it successfully? Company is a 500+ employee firm so Payment of Gratuity Act definitely applies to them.
ago in Salary & Savings by (24 points) | 1 view

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Honestly, this is one of the most misunderstood things in Indian employment law and your HR being vague is a red flag.

Here's the actual situation. The Payment of Gratuity Act 1972 says 5 years of continuous service. BUT there's a very important Supreme Court judgment — it basically said that if you've completed 4 years and 240 days in the 5th year, it counts as 5 completed years for gratuity purposes. 240 days because that's how many working days are counted in a year for most companies (if your company works 6 days a week, the threshold is 190 days in the 5th year).

You said 4 years 8 months. That's roughly 4 years and around 240+ days depending on exact dates. You almost certainly qualify.

The formula is simple:
Gratuity = (Last drawn basic + DA) × 15/26 × Number of years of service

Your basic is ₹32,000. So rough calculation:
32,000 × 15/26 × 5 = approximately ₹92,307

Not a small amount. Worth fighting for.

What most people get wrong — they assume gratuity is calculated on CTC or in-hand salary. No. It's only basic + DA. Many IT companies keep basic deliberately low to reduce this liability. Still, ₹92k is worth claiming.

What you should do right now:
1. Get your exact joining date and calculate if you've crossed 240 working days in your 5th year
2. Send a written email to HR requesting gratuity details — don't just ask verbally
3. If they refuse, you can file a complaint with the Controlling Authority under the Gratuity Act — this is usually the Labour Commissioner in your city
4. Gratuity must be paid within 30 days of it becoming payable. If delayed, company owes you interest too

Don't let HR brush this off. A 500+ employee company knows the law. They're just hoping you don't. Send that email before you resign, and keep all records of your joining date, payslips showing basic salary.

My recommendation — calculate your exact working days right now using your offer letter date. If you're past 240 days in year 5, put it in writing to HR immediately and cite the Supreme Court position on this.
ago by (48 points)