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LabourAct No. 39 of 1972Repealed

The Payment of Gratuity Act, 1972

This act has been repealed and replaced by Code on Social Security, 2020 (from 21 November 2025). It may still be referenced in ongoing matters. This reference is maintained for academic and archival purposes.

Mandated payment of gratuity to employees completing five or more years of continuous service, upon retirement, resignation, or death, at 15 days' wages for each completed year of service, subject to a ceiling (enhanced to ₹20 lakh in 2018), in establishments with 10 or more employees. Repealed and subsumed by the Code on Social Security, 2020 with effect from 21 November 2025, which carries the gratuity framework forward and extends pro-rata gratuity to fixed-term employees after one year of service.

Sections
15
Ministry
Ministry of Labour and Employment
Last Amended
2018-03-29

Key Provisions

→Eligibility: 5 years of continuous service (reduced to 1 year for seasonal workers)
→Calculation: 15 days' last drawn wages per completed year of service
→Maximum gratuity ceiling: ₹20 lakh (2018 amendment)
→Nominee designation by employee
→Forfeiture: on termination for moral turpitude or serious misconduct
→Payment to legal heirs on employee's death
→Controlling Authority and Appellate Authority for disputes
→Establishment with 10+ employees: mandatory coverage

Related Practice Areas

employment-law
gratuitypayment of gratuity5 years serviceterminal benefitsemployment

Section-by-Section Reference

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Indian government legislation is in the public domain under S.52(1)(q) of the Copyright Act, 1957. This reference is for educational purposes. Laws are amended frequently — verify the current text on the e-Gazette of India before relying on it for legal proceedings.