Full and Final Settlement in Saral PayPack.You can also see how it works in Saral Paypack click on the link below: Payment of Bonus Act – Applicability and calculations.A quick guide to Payment of Gratuity in India.Make sure to provide all required documents for the process of FnF.Make sure to settle any advances taken or ensure it gets adjusted in the final settlement.When does the settlement happen?Ĭlearance usually takes time, but it is a policy to clear FnF within 30-45 days after the employee’s last working day.įor gratuity, the stipulation is 30 days after leaving the company, while the bonus must be paid within the specified accounting year. All other payments attract TDS under Section 192 of the Income Tax Act. Gratuity and encashed earned leave are exempt from tax deducted at source (TDS) as per Income Tax Act.
If you fail to do so you need to pay with interest.ĭeductions include PF, ESI, PT (if applicable), Income Tax, and Compensation for Notice Period not served. (number of days of non-availed leaves * basic salary) / 26 days ( Avg paid days in a month).įor e.g., If an employee has 25 earned leaves which is not availed and basic salary = 5000, then encashed amount will beĪs per Section 7 (3) of the Payment of Gratuity Act 1972, Gratuity should be offered within 30 days of the resignation.
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