5 Yrs of Service- ask for Gratuity Benefits..!!!!

Know your gratuity benefits

ANAND KALYANARAMAN

If you stay on with your employer for 5 years or more, you will be entitled to gratuity when you resign, retire or are retrenched.
Job-hopping can increase your pay, but good old loyalty also has its perks. Stay on with your employer for five years or more, and you are entitled to gratuity when you resign, retire or are retrenched. This monetary reward to be paid by your employer in recognition of your years of service is mandated by the Payment of Gratuity Act. Most establishments employing 10 or more workers fall under the Act.
The amount you get as gratuity depends on the number of years you have served and the last drawn monthly salary. Roughly, you get half a month’s Basic and DA for every completed year of service. Here’s the formula to calculate gratuity: (Number of years of service) * (Last drawn monthly Basic and DA) *15/26. So, if you have served 30 years and draw monthly Basic and DA of Rs 20,000 when you leave the job, you get gratuity of Rs 3,46,154 calculated as (30 * 20,000 *15/26). Your employer can choose to pay you more but the maximum amount of gratuity according to the Act cannot exceed Rs 10 lakh. Amount paid above this will be in the nature of ex-gratia — something voluntary and not mandated according to law.
If you serve more than six months in the last year of employment, it is considered as a full year of service. For instance, if your tenure is 30 years and 7 months, the years of service for gratuity calculation will be rounded off to 31. But if you serve 30 years and 5 or 6 months, then the number of years of service will be considered as 30.
Waiving the rule
Going by the book, gratuity is payable only if you have been with the employer for five years or more. But this rule is waived if an employee dies or is disabled. In such cases, gratuity is paid to the nominees or to the employee, even if the tenure is less than 5 years.
Even employees not covered under the Payment of Gratuity Act are entitled to gratuity. But in such cases, the formula for gratuity calculation differs. It is computed as the (number of years of service) * (average monthly salary in the last 10 months of employment) * (15/30). This computation makes the gratuity amount lesser than that under the Act. For instance, in the above example, an employee not covered by the Act will be entitled to Rs 3,00,000 as gratuity, calculated as (30 * 20,000 * 15/30). This is Rs 46,154 lower than employees covered under the Act are entitled to. Another difference is that only fully completed years of service are considered in the calculations, and partial service in the last year, even if it in excess of six months, is ignored. For instance, service of 30 years and 7 months, will be considered as 30 years and not 31 years.
Another positive is the favourable tax treatment that gratuity receipt enjoys. Tax treatmentIf you are a government employee, then the entire amount you get is exempt from tax. If you are not a government employee but are covered under the Act, you get tax deduction for an amount which is the lower of the following:
a) Actual gratuity received
b) 15 days Basic and DA for each completed year of service (according to calculations in the example above)
c) Rs 10 lakh
Say, in the instance above, your employer paid you gratuity of Rs 5,00,000, which is more than the Rs 3,46,154 actually payable under the law. You will enjoy tax deduction on Rs 3,46,154 and the surplus Rs 1,53,846 will be subject to tax. Note that the total tax deduction on gratuity amounts received, including those from previous employers in earlier years, cannot exceed Rs 10 lakh.
Employees not covered under the Payment of Gratuity Act are also entitled to tax deduction on the amount they receive. The deduction rules are similar to those applicable for employees covered by the Act.
anand.k@thehindu.co.in(This article was published on December 21, 2013)

http://www.thehindubusinessline.com/features/investment-world/know-your-gratuity-benefits/article5487047.ece

Sweet pill for sugar mills ....

Sweet pill for sugar mills in higher ethanol blending cap

fe Bureau | New Delhi | Updated: Dec 12 2013, 15:57 ISTSUMMARYCash-starved sugar mills stand to gain an annual Rs 7,500 crore if an informal group of ministers

Cash-starved sugar mills stand to gain an annual Rs 7,500 crore if an informal group of ministers’ recommendation to double the mandatory blending of ethanol with petrol to a 10:90 ratio were to be implemented. This assumes that raising the blending limit will stir competition among industrial consumers, paving the way for the diversion of some molasses, even with sucrose content, towards the bio-fuel production and drive up prices of ethanol and sugar by 10% each.
Considering that the country needs 244 million tonnes of cane with an average recovery rate of 10% to produce the predicted sugar output level of 24.4 million tonnes for 2013-14, this benefit, albeit indirect, will translate into roughly R31 per quintal of cane.
However, there would still be a viability gap for sugar mills, especially those in Uttar Pradesh where the state-advised price (SAP) of R280/quintal for cane is way above the “viable price” of R225 as per the formula mooted by the C Rangarajan panel.
It is another matter though that considering the experience so far, 10% ethanol blending is an idea easier proposed than implemented. Ethanol content in petrol in India is projected to be just 2% this fiscal, even though 5% blending was first approved a decade ago.
Factoring in a direct benefit of R2.25 per quintal on interest-free loans recently announced by the Centre as well as an additional R11.03 per quintal incentive provided by the UP government in the form of a waiver of entry tax, purchase tax and society commission, the supposed indirect benefit of R31 per quintal from the 10% blending programme could significantly bridge the gap between the current viable price and SAP in the state.
Once endorsed by the Cabinet, the suggestion of the panel led by agriculture minister Sharad Pawar could provide sugar mills R7,050 crore more a year on a consumption level of 23.5 million tonnes if prices of the sweetener move up by 10% from the current R3,000 per quintal. Moreover, mills may get an additional R441 crore even on a supply of 105 crore litres for the current 5% blending limit if ethanol prices rise 10% from the average rate of R42 per litre, as offered against the last tender finalised by oil marketing companies (OMCs) in August.
However, the price of ethanol for the additional supplies of 105 crore litres to realise the 10% blending target will have to rise significantly to make it viable for mills, said Abinash Verma, director-general of the Indian Sugar Mills Association (ISMA). This is because to generate the additional quantity while keeping supplies steady for other consuming sectors — including chemical and potable alcohol industries — the mills have to produce ethanol from even B-heavy molasses, which also contain some sugar content. Currently, mills produce ethanol from C-heavy molasses after extracting the optimum amount of sucrose content.
The diversion of B-heavy molasses into ethanol production for an additional 105 crore litres will result in a reduction of sugar production by 1.7 million tonnes, according to sugar analysts.
To offset mills against the reduction of sugar stocks, OMCs have to offer at least Rs 50 per litre of ethanol, one of them said.
However, reducing sugar production by 1.7 million tonnes will have an indirect benefit for the industry in the form of cutting the current glut in supplies and preventing a sharp downward spiral in prices. It will generate up to Rs 5,500 crore of cash from ethanol sales for the industry, which has been marred by a liquidity crunch due to excess stocks and low realisations from sugar sales as demand stays steady while raw material costs remain elevated. Of course, it would save some interest costs for mills over and above the benefits mentioned above.
However, senior industry executives, while hailing the government’s move to raise the blending limit, have expressed doubts over the actual implementation of the progamme any time soon. This has also cast serious doubts over the government’s target of 20% mandatory blending by 2017.
While OMCs blame lack of adequate supplies for their inability to implement the programme, producers say the “slow and delayed” action by OMCs in floating and finalising tenders are to be blamed for this. The government’s latest deadline of June 30, 2014, for the strict implementation of the 5% blending has already expired, making deadlines irrelevant.
http://www.financialexpress.com/news/sweet-pill-for-sugar-mills-in-higher-ethanol-blending-cap/1206580/0