1-Year Gratuity Rule: Historic Change for Fixed-Term Workers
Game-changing reform! Code on Social Security 2020 now allows fixed-term employees to receive gratuity after just 1 year of service—down from 5 years. This affects 80% of gig and contract workers.
📜 Historic Amendment: Payment of Gratuity Act, 1972
❌ Old Rule (Pre-2025)
- • Minimum 5 years continuous service
- • Fixed-term workers excluded
- • Only permanent employees eligible
- • Contract workers got nothing
✅ New Rule (2025 onwards)
- • Just 1 year service required
- • Fixed-term employees included
- • Platform workers covered
- • Contract workers eligible
👥 Who Benefits from This Change?
Delivery Partners
Zomato, Swiggy, Amazon, Dunzo, Zepto workers जिन्होंने 1+ year काम किया है
Cab Drivers
Uber, Ola, Rapido drivers with 365+ days active service
Contract Workers
Factory, construction, warehouse में fixed-term contract वाले employees
�� Gratuity Calculation Formula
Gratuity = (Last Drawn Salary × Years of Service) ÷ 26
Last Drawn Salary = Basic + DA (Dearness Allowance)
📊 Example 1: Delivery Partner
• Last Salary: ₹20,000/month
• Service: 1 year
• Calculation: (20,000 × 1) ÷ 26
💰 Gratuity: ₹769
📊 Example 2: Contract Worker
• Last Salary: ₹35,000/month
• Service: 3 years
• Calculation: (35,000 × 3) ÷ 26
💰 Gratuity: ₹4,038
⚠️ Important Limits:
- Minimum Tenure: 1 year (365 days continuous service)
- Maximum Amount: ₹20 lakhs (ceiling imposed by law)
- Rounding: 6+ months count as full year (e.g., 2 years 8 months = 3 years)
📝 How to Claim Your Gratuity
Submit Form I
Employer को resign करते समय Form I (Application for Payment of Gratuity) submit करें। यह resignation के साथ या अलग से भी दे सकते हैं।
Attach Documents
Required documents:
- Joining letter / Appointment letter
- Relieving letter / Resignation acceptance
- Last 3 months salary slips
- Bank account details (cancelled cheque)
- Aadhaar + PAN card copy
Employer Response Timeline
Employer को 30 days के भीतर gratuity pay करना होगा। Delay पर simple interest @ 10% per annum लगेगा।
If Employer Refuses?
Controlling Authority (Labour Commissioner) को complaint करें:
- File grievance online on shram.gov.in
- Timeline: 30 दिनों के भीतर hearing होगी
- Penalty: Employer पर ₹10,000 तक fine + interest
💸 Tax Treatment of Gratuity
✅ Tax-Free Limit: ₹20 lakhs तक gratuity 100% tax-free है (Section 10(10) of Income Tax Act)।
📊 Calculation for Tax: निम्नलिखित में से जो सबसे कम हो, वह tax-free होगा:
- Actual gratuity received
- ₹20 lakhs
- 15 days salary × years of service (for non-government employees)
⚠️ Note: ₹20L से ज्यादा gratuity मिली तो excess amount taxable होगा। लेकिन gig workers के लिए यह rare है।
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