Gratuity calculation

[udit gupta]

Dear Sir, We (Technopak Advisors Pvt. Ltd.) have a gratuity trust. Please advise us what will be gratuity calculation:- 1) Basic*26/15*numbers of year or 2) 10 month average salary Please advise me what will be right calculation with example. Thanks Narendra 9910365950

AI Summary

Clarification on Gratuity Calculation: Use Last Drawn Wages Formula Under The Gratuity Act with a Cap of Rs. 10 Lakh. A query was raised regarding the calculation of gratuity by a representative from Technopak Advisors Pvt. Ltd., seeking clarification on whether it should be based on the formula 'Basic*26/15*number of years' or a '10-month average salary.' A response clarified that under The Gratuity Act, the calculation should be based on the last drawn wages divided by 26, multiplied by 15 days for each completed year of service or part thereof exceeding six months, with a cap of Rs. 10 lakh. Employers may offer more favorable terms than the statutory minimum.