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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 India’s leading publications for well over a decade. Having swam and mastered the treacherous waters of corporate and personal read more...
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