Gratuity Payable - Do we consider her Maternity Leave given from ESI as Service Period?

Kindly give your valuable suggestions on Gratuity Payable. If an Employee works for 5 years He/She is eligible to get Gratuity.
But, What should we do in the below case.
1. An Women Employee goes on ESI Maternity Leave by 4.5 Years (Her Service Period).
2. After completing 182 Days of Maternity Leave, She came and explained that She is unable to come to Work as She has to take care of his Child. The Management also accepted her willingness.
3. When preparing Full & Final Settlement, Do we consider her Maternity Leave given from ESI as Service Period?
4. Should we provide Gratuity to Her or Not ?
29th June 2018 From India, Kochi

Continuous service will include the days any employee was on authorized leave. Maternity leave being days a woman employee is authorised to get, whether from ESI or from the company, if she has taken 6 months leave, that period will be considered as service period for the purpose of deciding gratuity. Therefore, after 4.5 years, a woman employee goes for maternity leave and comes back after the permitted 182 days and then resign, she should be paid gratuity considering her 182 days as service periods.
29th June 2018 From India, Kannur

Dear Kumaresh,
Yes, keeping in mind the above situation the employee is entitled for the gratuity. Also, you can ask for the notice period or in lieu of notice period payment from the employee in case the same clause is available in your appointment letter.
30th June 2018

Dear Sir’s, Thanks for your Valuable Time in replying My Query. Will proceed as You advised.
30th June 2018 From India, Kochi

CLARIFICATION ON APPLICABILITY OF TDS ON PAYMENT OF GRATUITY.
Company-A was taken over by Company-B in June 2015 under an Operation, Management & Maintenance Agreement (OMMA) alongwith the Plant & Machinery; and the Employees under a Dual Employment Agreement (DEA).
01 DEA Employee aged 51+ Years has now been inducted into Company-B w.e.f. 01/05/2018, after having Resigned both from Company-A and DEA on 30/04/2018.
This employee has a Total reckonable Service of 29 Years.....[Company-A : 26 Yrs + Company-B : 03 Yrs].
Now, Company-B wants wants to settle the Full & Final for the period prior to May-18; an has calculated the Gratuity amount for a Total of 29 Years Service amounting to approx. INR 12.00 Lakhs......[Company-A : Rs. 10.50 L + Company-B : Rs. 10.25 L].
Please Clarify if TDS @ 31.2% is liable to be deducted on the Gratuity amount if :
1. Company-B pays the entire Gratuity for 29 Yrs service period; or
2. Company-B pays their share of Gratuity for 03 Years service under the DEA; or
3. Company-A pays their share of Gratuity for 26 Years of service rendered with them.
The Accounts Deptt. at Company-B is treating the Gratuity component of the Full & Final Payment [including Earned Leave (EL) Encashment + Bonus for the last FY 2017-18 and upto Apr-18 this FY] as any other Salary component while clearing the payment thereof.
Sandeep
26th July 2018 From India, Khargone

Dear Kumarsh and Sandeep,
Though the matter already very well explained by Mr Madhu and Mr Manoj, however, pls find attached notification in case you need to show the same as documentary evidence:-
1 Enhancement of Tax free Gratuity amount upto Rs. 20 Lakh. The employer can pay over and above the limit, that only will attrat TDS. Upto Rs. 20 lakh TDS is not applicable.
2 For the purpose of calculating the Gratuity period in case of a female employee “Twenty Six” weeks period will be countable as Service Period.
Thanks.
26th July 2018 From India, Delhi

Attached Files (Download Requires Membership)

Gratuity AM-02-Limit to Rs. 20 L-29-03-2018.pdf (818.1 KB, 121 views)