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| Payment Of Gratuity Act,
1972 |
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| Applicability |
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1. Every factory (as defined in Factories
Act), mine, oilfield, plantation, port and railway.
2. Every shop or establishment to which Shops &
Establishment Act of a State applies in which 10
or more persons are employed at any time during
the year end.
3. Any establishment employing 10 or more persons
as may be notified by the Central Government.
4. Once Act applies, it continues
to apply even if employment strength falls below
10. |
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| Eligibility |
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1. Any person employed
on wages/salary.
2. At the time of retirement or resignation or on
superannuation, an employee should have rendered
continuous service of not less than five years,
3. In case of death or disablement,
the gratuity is payable, even if he has not
completed 5 years of service. |
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| Benefits |
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1. The quantum of gratuity is to
be computed at the rate of 15 days wages (7 days
wages in case of seasonal establishments) based
on rate of wages last drawn by the employee concerned
for every completed year of service or a part
thereof exceeding 6 months.
2. The total amount of gratuity payable shall
not exceed the prescribed limit.
3. In case where higher benefit
of gratuity is available under any gratuity
scheme of the Co., the employee will be entitled
to higher benefit |
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| Calculation
of Gratuity |
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1. Gratuity = Monthly Salary
x 15 days x No. of yrs. of service
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2. Max. Gratuity payable under
the Act is Rs. 3,50,000/- (w.e.f. 24-9-1997) |
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| Penal
Provisions |
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| Nonpayment of gratuity payable
under the Act is punishable with imprisonment
up to 2 years (minimum 6 months) and/or fine
up to RS 20,000/-. Other contravention/offenses
attract imprisonment up to 1 year and/or fine
up to RS 10,000. |
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