Can somebody please guide on Gratuity…

1) is it mandatory to have gratuity provisions or can an undertaking be taken from employees for not claiming gratuity in future. In case, an undertaking can be taken, will it be considered valid in case somebody claims.

2) if to implement, then can it part of CTC or additional cost head. Also, how much –15 days of basic salary or some percentage of CTC.

3) when to implement — from 5th year of employment or earlier.. what happens if it is part of CTC and employee leaves before completing 5 years. 

looking forward to views, general practice and how best to implement in SMEs.

Best Regards


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