Am I eligible for gratuity if I resign after 4 years and 8 months?

Question

I am resigning after working for 4 years and 8 months and want to know if I qualify for gratuity and how it is calculated. I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

Am I eligible for gratuity if I resign after 4 years and 8 months? is governed in India primarily by Payment of Gratuity Act 1972, Section 4 and Payment of Gratuity Act 1972, Section 2A. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 4 requires 5 years of continuous service for gratuity eligibility on resignation, but Section 2A treats an employee who has worked 240 days in the preceding 12 months as having completed a year of continuous service, and courts have held that 4 years 240 days can qualify as 5 years for this purpose.

Gratuity is calculated as 15 days' wages (basic plus dearness allowance) for every completed year of service, using the formula: (last drawn salary x 15 x number of years) divided by 26.

The maximum gratuity payable under the Act is currently capped at Rs 20 lakh, though employers may pay higher amounts under a contractual or company gratuity scheme.

Gratuity must be paid within 30 days of it becoming payable, failing which the employer is liable to pay simple interest for the period of delay under Section 7.

An employee can be denied gratuity only on proven grounds of termination for riotous or disorderly conduct or an act constituting an offence involving moral turpitude, under Section 4(6), and even then only up to the extent of damage caused.

What to do next: 1) Verify your total days worked in each of the last 5 years including approved leave to establish 240-day years; 2) Submit Form I to your employer applying for gratuity within 30 days of leaving service; 3) If denied, escalate in writing citing the 4 years 240 days precedent and Section 2A; 4) File a claim before the Controlling Authority under the Payment of Gratuity Act if the employer refuses payment.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Payment of Gratuity Act 1972, Section 4 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.