INDIA GRATUITY POLICY (V 1.

4)

Prepared By Reviewed by Approved By

Hemanth Kumar
Newton MJ Raj Dharmaraj
Name Thiyagarajan
(542903) (127311)
(225944)

Date 09 April, 2018 10 April, 2018 10 April, 2018

Version History

Based on HR/STOB/IN/3 practice and precedence in Cognizant-India.

V 1.1
Introduction of new levels, titles, template and version control.

V 1.1 Change in the eligibility criteria for associates joined on or after October 01, 2004

V 1.2 Change in the eligibility criteria for death cases

Change in payment computation for death cases whose date of joining is before October
01, 2004
V 1.3
Addition on the scope for Associates taking assignments outside India
Addition on the scope for Associates in Cognizant India affiliates.

V 1.4 Increase in the Non Taxable Gratuity Payment from INR 10 Lakhs to INR 20 Lakhs

India Gratuity Policy V1.4

Contents

1. Artifacts from “Payment of Gratuity Act, 1972”......................................................................................... 3

2. Overview ........................................................................................................................................................ 3

3. Scope ............................................................................................................................................................. 3

4. Definitions...................................................................................................................................................... 3

5. Eligibility ........................................................................................................................................................ 4

6. Approvals....................................................................................................................................................... 6

7. Procedure ...................................................................................................................................................... 6

8. Responsibility Matrix .................................................................................................................................... 6

9. Exceptions Handling .................................................................................................................................... 6

India Gratuity Policy V1.4

 INDIA GRATUITY POLICY

1. Artifacts from “Payment of Gratuity Act, 1972” (“Act”)

1.1 Eligibility conditions:
Gratuity is payable to every employee, other than an apprentice, in an establishment to which the
provisions of the Act applies, on termination of his/her employment either due to superannuation or
retirement or resignation, subject to completion of continuous service for not less than five years. Gratuity
is also payable in case of termination of service due to death or disablement which incapacitates the
employee to work due to accident or disease and there is no attached requirement pertaining to completion
of continuous service in these two contingencies.
1.2 Quantum of Gratuity:
For every completed year of service or part thereof in excess of six months, the employee is entitled
to Gratuity at the rate of fifteen days’ wages based on the rate of wages last drawn i.e. basic salary/wage.

2. Overview
2.1 Cognizant Technology Solutions India Private Limited (“Cognizant India”) and its Indian affiliates
incorporated in India lays this Gratuity policy (“Policy”) which details the criteria, eligibility and procedure
applicable for payment of Gratuity (“Gratuity”) to its associate
2.2 This Policy stands amended as on March 29, 2018.

3. Scope
3.1 The Policy covers all associates (as defined under this Policy) hired by Cognizant India or its Indian
affiliates and joined from non-Indian Cognizant entity
3.2 As per the Policy, Gratuity is applicable on completion of continuous service as per Act.

4. Definitions
4.1 Gratuity: Lump sum payment made by the employer as a mark of Gratitude / recognition of the service
rendered by the employee on retirement or during cessation of employment. It is a benefit plan and one
of the retirement benefit offered by the employer to the employee upon cessation of employment. For the
purposes of this policy “gratuity” is restricted as per Act
4.2 Dependents: As nominated by the associate in the nomination form or as per the Legal Heir Certificate
issued by the Revenue authority of the state and/or Succession Certificate issued by a court of competent
jurisdiction
4.3 Continuous service: Employment with Cognizant India or its Indian affiliates without a break in service
4.4 Associate: Full time employee of Cognizant India or its Indian affiliates
4.5 Onsite assignment: Employment with Cognizant Group outside India and such period would be
considered for Gratuity only in cases where the employment with Cognizant India is subsisting

India Gratuity Policy V1.4

 4.6 Affiliate: Any subsidiary of Cognizant Technology Solutions Corporation incorporated in India whether
formed organically by Cognizant or through acquisition of the common stock (share capital) of that entity.
In the case of acquisition, the employee service start date for the purposes of eligibility to Gratuity would
be the date of joining the acquired entity
4.7 Joined: Hired into Cognizant Technology Solutions India Private Limited or its Indian affiliates from
external OR transferred from one of those non-Indian Cognizant entity.

5. Eligibility
5.1 Associates who have joined before October 01, 2004
5.1.1 At the time of separation or retiring from Cognizant India, associate shall be eligible for one-time
Gratuity, provided he/she has completed continuous service of not less than three years
5.1.2 Amount of Gratuity is computed at the rate of one month (last drawn India) basic salary for every
completed year of service or a part thereof, in excess of six months.
5.1.3 It is calculated as: Last drawn India basic salary multiplied by Number of years of service in
Cognizant
5.1.3.1 There is no ceiling on the maximum gratuity payable to associates who have
joined Cognizant India before October 01, 2004.
5.1.3.2 The payment payable under this section is the sum of taxable and non-taxable Gratuity
5.1.3.3 Non Taxable Gratuity: Payment calculated as per the Act (i.e.) Last drawn India basic
salary divided by 26 and multiplied by 15. Arrived value should be multiplied by Number
of years of service in Cognizant. [{(last drawn basic / 26) x 15} x no. of years of service
in Cognizant]
5.1.3.4 Taxable Gratuity: Payment calculated as per 5.1.3 minus 5.1.3.3.
5.1.4 In case of death or disablement which incapacitates the Associate to work due to accident or
disease,

o The minimum service requirement of continuous service is not applicable.

o Amount of Gratuity is calculated on the sum of below two parameters.

(a) Service in Cognizant: Last drawn India basic salary multiplied by Number of years of
service in Cognizant India

(b) For service left till retirement, retirement age being 58: Last drawn India basic salary
multiplied by Number of years of service till retirement (limited to INR 2,000,000 (Twenty
Lakhs Only) or actuals computed whichever is lesser).

5.2 Associates who have joined on or after October 01, 2004

5.2.1 Provisions under this clause shall be applicable to Associate who has joined Cognizant India on
or after October 01, 2004 and Associates who joined Cognizant Indian affiliates either before or
after October 1, 2004

India Gratuity Policy V1.4

 5.2.2 At the time of separating or retiring from Cognizant India or its Indian affiliates, associates are
eligible for this one-time Gratuity if they have completed continuous service of not less than four
years and 240 calendar days
5.2.3 Gratuity is computed at the rate of fifteen days (last drawn India) basic salary (or as per the latest
revision under the Act) for every completed year of service or a part thereof, in excess of six
months
5.2.4 It is calculated as : [{(last drawn basic / 26) x 15} x no. of years of service in Cognizant]

Note: The gratuity payable to associates who have joined Cognizant India or its Indian affiliates
is limited to a maximum of INR 2,000,000/-.

5.2.5 In case of death or disablement which incapacitates the Associate to work due to accident or
disease,

o The minimum service requirement of continuous service is not applicable

o Gratuity is calculated as [(last drawn India basic salary/26) x 15 x (Number of years of service
+ service left till retirement, retirement age being 58)].

o The completion of continuous service of four years and 240 calendar days is not necessary.

o The total gratuity payable is limited to a maximum of INR 2,000,000/-.

5.3 General:
5.3.1 Associates who have joined Cognizant India or its Indian affiliates, retain an ongoing employment
relationship during their Onsite assignment, and if resign during Onsite assignment post
completion of four years and 240 calendar days of continuous service including both India and
Onsite service period

Note: The minimum service requirement of continuous service is not applicable in event of death
or disablement as enumerated under this Policy

5.3.2 Gratuity shall be made when an in-scope Associate separates either from Cognizant India or its
Indian affiliates due to resignation, retirement or death
Note: For purposes of calculation, any service less than six months will not be considered and
service greater than six months will be considered as one year
5.3.3 No payment towards Gratuity will be made in case the Associate has been terminated for
misconduct involving financial fraud and/or misappropriation of funds
5.3.4 Gratuity cannot be adjusted against any dues payable by the Associate to Cognizant India or to
its Indian affiliates
5.3.5 Gratuity is payable to associates who joined Cognizant India or its Indian affiliate from a non-
Indian entity. For the purpose of continuous service, date of starting employment with Cognizant
India or its Indian affiliates to the date of separation from Cognizant India or its Indian affiliates.
No eligibility shall arise due to employment by a non-Indian entity
5.3.6 For the purpose of determining period of Continuous service leave on Loss of Pay (LOP) period
will also be counted

India Gratuity Policy V1.4

 Note: If the Associate rejoins Cognizant or its Indian affiliates after voluntary or involuntary
termination of employment, past service will not be considered as part of continuous service for
the purposes of computing Gratuity.

For more information, click FAQs, please visit Gratuity ‘Professional life event’ on Navigator

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6. Approvals
Not Applicable

7. Procedure
7.1 Gratuity will be paid to the eligible Associate as detailed above
7.2 Gratuity will be paid to the Associate as a part of full and final settlement
7.3 In case of death, Gratuity will be paid to the nominee after collecting necessary documents from the
nominee.

8. Responsibility Matrix
8.1 Associates: Responsible for declaring and updating the details of the dependents or nominees.

9. Exceptions Handling
9.1 The benefit of this policy is governed by the terms and conditions of employment in practice at Cognizant
India and its Indian affiliates. This is subject to change from time to time. Cognizant India reserves the
right to amend its policies as necessitated. All statutory requirements are applicable as mandated by law
9.2 All exceptions to this will be directed to the HR India Compliance
9.3 In case of any inconsistency or doubt on any of the provisions of this Policy and the Act, the provisions
of the Act shall prevail to that extent.

India Gratuity Policy V1.4