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The Payment of Gratuity Act 1972 is a social security enactment. It is derived from the word gratuitous, which means gift or present. However, having being enacted as a social security form, it ceases to retain the concept of a gift but it has to be seen as a social obligation by an employer towards his employee.
Section 2: Definitions
(a)"appropriate Government" (b) "completed year of service (c)"employee" (d)"employer" (e)"family" (f)"retirement" (g)"wages" (h)Superannuation
Section 6: Nomination
Each employee, who has completed one year of service, shall make nomination for to receive the amount of gratuity.
In his nomination, an employee may, distribute the amount of gratuity payable to him amongst more than one nominee. If at the time of making nomination he has already family, he can not make nomination in favour of a person who is not a member of his family. If he does so it shall be void. Fresh nomination in favour of one or more members of his family is required where he has not family at the time of making nomination. If a nominee predeceases the employee, the interest of the nominee shall revert to the employee who can make a fresh nomination. Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be sent by the employee to his employer, who shall keep the same in his safe custody.
A person who is eligible for payment of gratuity shall send a written application to the employer. The employer shall determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined as soon as gratuity becomes payable and whether or not an application has been made by the concerned employee. The employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable. How to calculate the Amount of Gratuity
Section 7A and 7B
Section 7A: Inspectors
Section 9: Penalty
Knowingly making false statement/ false representation to avoid to make payment imprisonment up to 06 months, or with fine which may extend to Rs.10,000/- or with both. Breach, or makes default in complying with any of the provisions of this Act imprisonment for 03 months to 01 year, or with fine which shall not be less than Rs.10,000/- but which may extend to Rs.20,000/- or with both. Non-payment of any gratuity imprisonment 6 months to 02 years + a fine.
If Employer proves: (a) that he has used due diligence to enforce the execution of this Act, and (b) that the said other person committed the offence in question without his knowledge, consent or connivance
(2)
No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act.
Section 12: Protection of action taken in good faith. No suitor other legal proceeding shall lie against the controlling authority or any other person in respect of anything which is in good faith done or intended to be done under this Act or any rule or order made there under.
Amendments
Government proposal to raise income tax exemption limit for gratuity funds from Rs 3.5 Lakh to Rs 10 Lakh. Trade unions , Ficci and Industry support List of amending Acts:
1. 2. 3. 4. 5. The Payment of Gratuity (Amendment) Act, 1984 (25 of 1984). The Payment of Gratuity (Second Amendment) Act, 1984 (26 of 1984). The Payment of Gratuity (Amendment) Act, 1987 (22 of 1987). The Payment of Gratuity (Amendment) Act, 1994 (34 of 1994). The Payment of Gratuity (Amendment) Act, 1998 (11 of 1998)
Forms
semester 3\IR\form-NOR.doc