Gratuity Calculation: Government increase gratuity to Rs. 1million

There is good news for the Indian private sector workers. On March 4, 2010, the union cabinet amended the gratuity act and increased the amount of gratuity given to the private sector employees from Rs.3,50,000 to Rs.1 million. The proposal had been cleared in the cabinet meeting presided by Prime Minister Manmohan Singh. The amendment bill will now go to Parliament and be presented at the current budget session. With this new decision, now private sector employees would get equal amount of gratuity like government employees. The tax free gratuity of the central government employees had been raised by the sixth pay commission.

Every working person who has completed five years in government or private service is eligible for half a month’s salary as gratuity for every year completed in the service. Every employer with “more than ten salaried workers” is mandated to provide gratuity to eligible employees but many private sector employers do not have their gratuity liabilities adequately funded. From now on, the listed companies would have to disclose their gratuity liability.

This is a very good decision taken by the Indian government. If you want to calculate your gratuity here is the formula:

1. basic/26 x 15 days x number of years of service

OR

2. BASIC + DA (Last Pay drawn) X 15 /26 X No. OF YEARS WORKS

Gratuity is to be paid to any employee only he provides service for a minimum time of five years at a stretch with his employer in company. The Gratuity calculation is done as per the last average remuneration drawn and time in years served by an employee.

If you are still having problem then visit this link: http://profit.ndtv.com/Calculators/gratuity.htm

Indian government is giving out funds worth Rs.3546 crore to the textile industry within three days

For the first time, Indian government is disbursing a large fund worth Rs. 2546 crore to the domestic textile mills to clear up their dues upto June 30, 2009. The textile industry of India had been badly affected by the economic recession. The money will be released under the Technology Upgradation Fund Scheme (TUFS) and it will be released in three days. Under the TUFS, the government provides 5% subsidy for modernization and installation of new machineries and 10% capital subsidy.

The news was announced at a conference by Union Textile Minister, Mr. Dayanidhi Maran. He said that for the first time, the government had released such a large amount of subsidy in one go.

Out of this amount, the 3286 applicants from Tamil Nadu will receive Rs.643 crores, 1,186 applicants of Maharashtra will receive 637 crores, 1,543 applicants of Punjab will receive Rs.352 crores and 4,051 applicants from Gujarat will receive Rs275 crores. The funds will be transferred to 121 financial institutions around the country. In FY 2008-2009, the government released Rs. 2,632 crore under the scheme.

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The Hindu Business Line

Business Standard

Rising trend is becoming visible in tax collection in India

Indian government’s direct tax collection rose 17% in May 2009 to Rs. 11,919 crore (1 crore = 10 million). In April 2009, tax collection contracted 3.19% to Rs. 12,239 crore against Rs. 12,642 crore in the same period in FY 2007-2008. Following a 18.6% decline in February 2009, tax collection grew 0.92% in March 2009. Government would be able to get a better understanding of the current trend after advance tax payments in June. In July, the newly elected Indian government is going to present its first budget.

Here are some of the highlights of the ongoing tax collection trends:

• Despite, the instant surge in share prices immediately after the Indian Congress led UPA came to power, Securities Transaction Tax collection declined 24.75% to Rs. 795 crore in May 2009 against Rs.1057 crore in May 2008.
• Fringe Benefit Tax declined 5.57% to Rs. 103 crore against Rs. 109 crore in April-May 2008.
• Due to fast processing of returns, refund outgo in April-May improved significantly.
• In April-May refunds to non-corporate tax-payers grew 61.7% to Rs. 2149 crore against Rs. 1329 crore in the same period last year.
• Corporate tax collection in April May increased 5.56% to Rs. 8,578 crore from Rs. 8126 crore.
• Personal income tax grew 5.92% to Rs. 15,559 crore against 14,960 crore in the same period last year.

Related articles:

The Economic Times