LabourAct No. 39 of 1972Partially Repealed

The Payment of Gratuity Act, 1972

This act has been repealed and replaced by Code on Social Security, 2020.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

Mandates payment of gratuity to employees completing five or more years of continuous service, upon retirement, resignation, or death. Gratuity is calculated at 15 days' wages for each completed year of service, subject to a ceiling (enhanced to ₹20 lakh in 2018). The Act applies to establishments with 10 or more employees.

Sections

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.