Ex Gratia’s actual meaning is- “by virtue of grace” which means ‘From Favor’ in Latin. It refers to the amount that is paid in favor of the employer, organization, government, or insurer. This is done at its own discretion and it didn’t have any obligation or liability to pay it. These aren’t common and are subject to taxes.
The govt. makes the payment to a particular person to compensate for the damages or losses faced. The individual or the corporate or government paying this money to the victim will not expect anything in return as this is compensation for the damages that have been faced. This is termed as one of the best gestures of goodwill by the company or government, whoever is paying the quantity, towards the victims to assist in their critical times.
Also, See: Deferred Compensation
Solving Real Business Challenges with a Robust & Impeccable System