Payment of Gratuity Act 1972

by :
DR. T.K. JAIN
AFTERSCHO☺OL
centre for social entrepreneurship
sivakamu veterinary hospital road
bikaner 334001 rajasthan, india
www.afterschoool.tk
mobile : 91+9414430763

5 DECEMBER 09 www.afterschoool.tk 1
 What is gratuity ? ?
When an employee retires, he is give some
gratuitous payment, it is called gratuity.
Payment of gratuity is compulsory for some
organisations,when the employee completes at
least 5 years of service. Gratuity is calculated
using a formula : 15/26 * number of years
worked (here number of years will be rounded
off so 12 years 8 months become 13 years,12
Y. 2 months become 12).
5 DECEMBER 09 www.afterschoool.tk 2
 Nomination

As per section 6, every employee has to

nominate some person – nomination has to be
from family only (if there is family),
nomination out of family will not be acceptable
, if there is family.

5 DECEMBER 09 www.afterschoool.tk 3
 Time period for payment of
gratuity

Gratuity has to be paid in 30 days from the date

it becomes due. If there is delay beyond 30
days, the employer will pay simple interest @
rate notified by government for long term
deposits.

5 DECEMBER 09 www.afterschoool.tk 4
 Recovery of gratuity

If the employer doesnt pay gratuity, the

CONTROLLING AUTHORITY may ask
collector to collect the amount of gratuity from
the employer (section 8)

5 DECEMBER 09 www.afterschoool.tk 5
 Free from attachment

As per section 13, amount of gratuity cannot be

attached.

5 DECEMBER 09 www.afterschoool.tk 6
 Penalty

Penalty for contravention of this law is 10000

or fine of 6 months imprisonment or both.

5 DECEMBER 09 www.afterschoool.tk 7
 Superannuation

Sec. 2(r) when employee reaches age of

retirement or the age fixed for contract to
lapse, it is called superannuation. On
superannuation the contract of employement
will lapse.

5 DECEMBER 09 www.afterschoool.tk 8
 Family ...

Sec 2(h) dependent parents, spouse, dependent

parents of spouse, children, widow and
children of predeceased son

5 DECEMBER 09 www.afterschoool.tk 9
 Employer

As per section 2(f) : a person who is authority /

CEO / having ultimate control

5 DECEMBER 09 www.afterschoool.tk 10
 THANKS....

GIVE YOUR SUGGESTIONS AND JOIN

AFTERSCHOOOL NETWORK / START
AFTERSCHOOOL NETWORK IN YOUR
CITY
AFTERSCHOOOL@IN.COM
PGPSE – WORLD'S MOST
COMPREHENSIVE PROGRAMME IN
SOCIAL ENTREPRENEURSHIP
5 DECEMBER 09 www.afterschoool.tk 11