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Did you know teachers in India are eligible for a gratuity payment by law? Share this with every teacher you know.
September 5th is the day to express gratitude to our teachers. The best gift we can give our Gurus is to make them aware of their financial rights as per the laws.
Since the laws were amended in 2009, teachers are eligible for Gratuity. It’s a lump sum payout and a kind of a loyalty bonus which is given on retirement or on leaving the job to overcome loss of income. The teachers and educational institutes came under the Payment of Gratuity Act in 2009, when our government had amended the act whereby the meaning of an employee was amended in such a way to include teachers also.
The definition of an “establishment” was also broadened to include educational institutions under the Act. The amendment also said that the teachers should be paid gratuity dues from April 3, 1997 onwards.
But that’s the law. The schools and education institutions may not voluntarily abide by these rules as it’s a huge cash outgo for them. So every teacher ought to know how he or she can claim this financial right.
1. The eligibility for gratuity: The first criterion is that one must have served in an institution for five continuous years before resigning or on retirement. The school or college must have employed more than 10 people in the previous financial year.
2. The Gratuity Figure: Take note of two numbers. The basic salary and the dearness allowance in the year of leaving job or on retirement. Also calculate the number of years (take six months and above as one year) in the service. This is how the gratuity amount is arrived at:
Your monthly salary (Basic and dearness allowance) multiplied by Number of years of service (since Apr 3 1997) x 15/26
3. When does it become due: On retirement from school or college, or on leaving job after 5 years of service or on death or disablement.
4. How to apply for gratuity: The onus is first on the school to give it as and when it’s due. If that doesn’t happen, a written application within 30 days along with Form I should be given to the school or college. If one is applying after several years of retirement or resignation, be prepared for a legal battle.
5. Is there is limit on the amount of gratuity: The maximum amount payable under gratuity is upto Rs 10 lakh. Any amount above this will be taxable.
6. How do fight for the right: Teachers ought to arm themselves with various court judgments in which institutions have been directed to pay gratuity dues to the teacher associations.
a. Karnataka High Court Decision in Favor of KarnatakaUnaided Schools Managements’ Association (KUSMA)
b. Supreme Court judgement in favour of Association of College and University Superannuated Teachers, Maharashtra
Originally published here.
Pic credit: GunjanKarun (Used under CC license)
Rachna Monga Koppikar aka The Great Gruhini is a finance writer who’s worked with
Can I get the gratuity after one year of retirement
I superannuated in June 2016 from unaided catholic missionary school in Hyderabad Telangana.I have been given only Rs 150000 for 33years of service .can I ask now as per gratuity rules .
i am retiring on 30th april 2017.for my gratuity they have taken only basic and grade pay .DA is not included in calculation .I am working in Aided Jr college in Mumbai.
I retire at the end of last year when will I receive my gratuity
Teachers who face difficulty in getting their gratuity, we are here to your help
my father died in 2017 from primary school of Maharashtra from nanded district but after the one and half year still the school headmaster not ready to sign on the gratuity file .I also lost my mother year ago. sir, I complained number of time to the district and related authority but no action taken till the date by any authority…sir plz guide me what should I do now….mobile number 8600606009
My wife pr teacher retired in 2005 after serving for 32 years from an aided school in GWALIOR and expired from cancer in 2007 under the gratuity act 1997 she is entitled to get it how many years of service she is eligible
whom to complain if i am not getting graduity? state labour commissioner office or central labour commissioner office (my school is a cbse school in kerala state)
For unaided private schools, can gratuity amount be controlled by school management or the calculation involves all static parameters? Secondly, under what conditions can the gratuity be denied/altered?
Many thanks to all of you for commenting on this post. We shall soon have an updated post that will answer your queries.
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