Gratuity calculation

The relationship of a retainer is " Contract for Service", where as the relationship of a employee is " Contract of Service".

Hence, the gratuity has to be calculated from his date of joining with the company's payroll.

Sec 2{e} of the Payment of Gratuity Act

Other than apprentice anyone who is employed for wages and renders uninterrupted service for 5 years {240 days in a year} is eligible for gratuity.The corporate understanding on nature of association is not mentioned.The act is a independent legislation.

The association is in writing or in practice and reality.

“The Learned Hyderabad Bench of ITAT has held that where a professional is treated as an employee and is required to follow the rules and regulations similar to that imposed on its employees or his terms of appointment are such that those intend to create an employer employee relationship, then the payment made to professional is required to be treated as a salary and not as a professional fees and TDS is required to be deducted in terms of section 192 of Income Tax Act.”

Valuable advice of learned experts/members is sought.