| S.No | Particulars | Gratuity (Payment Of Gratuity Act,1972) | Bonus (Payment Of Bonus Act,1965) |
|---|---|---|---|
| Applicability | |||
| 1 | Organisation/Employer | Applies to all shops or establishments having 10 or more employees at any time during the preceding 12 months | Applies to every factory registered under Factories Act & Establishment employing 20 or more on any day during the year. |
| 2 | Employee/worker | Gratuity is payable only when the employee is in continuous service for 5 years |
The employee / worker receiving salary or wages up to Rs.21,000 per month. Such person should have worked for atleast 30days in the year. |
| Calculation | |||
| 3 | Minimum | Gratuity payable = ( Last drawn basic salary + DA ) *15/26 *No of completed years of service | Minimum: 8.33% of salary/wages (or) Rs. 100 (whichever is higher) Maximum: 20%(if wages is more than 7000/month restrict the salary or wages to Rs. 7000 for the purpose of calculation of minimum bonus ) |
| Salary or Wages definition | |||
| 4 | Inclusion | Basic + D.A. | Basic + D.A. |
| Compliance | |||
| 5 | Due Date | Within 30 days from the date the gratuity becomes payable. | Within 8 months from the end of the accounting year. |
| Income tax impact | |||
| 6 | Tax impact | Gratuity received by an employee upto Rs. 20,00,000/- is exempt in the hands of the employee under section 10(10) of the Income tax Act, 1961. | Bonus is taxable in the hands of the employee at regular slab rate. |