The document summarizes the key aspects of the Gratuity Act of 1972 in India. It applies to employees working in establishments with 10 or more employees, including factories, mines, plantations, ports, and railways. Gratuity is a lump sum payment made to an employee on termination of employment based on their length of service. It is payable for continuous service of 5 years or more, or in case of death or disability regardless of service period. The maximum gratuity payable is Rs. 20,00,000 and is calculated as half a month's basic salary plus dearness allowance for each completed year of service. Employers must pay out gratuity within 30 days of it becoming due.

1. Presented by:
Mandeep Rangsha
Roll no: GM 21/16
Department of Management
NEHU, (Central university, India)
GRATUITY ACT - 1972

2. Introduction:
Latin word –Gratuitous
Gratuity means a lump sum payment made by an
employer as the reward for his past service when
his employment is terminated.

3. Applicability of the act:
Depends on two factors:
1. Employed in an establishment to which the act
applies –
(a) Every factory, mine, oilfileds, plantation, port and
railway company.
(b)Shop and establishment covered under SHOPS and
establishment act where more than 10 or more persons
– immediately preceding to 12 months.

4. Contd.
2. He should be an employee : skilled, semiskilled,
unskilled, manual etc.
With removal of celiing of wages every employee
will become eligible for gratuity, irrespective of
wages level.

5. PAYMENT OF GRATUITY
Gratuity is payable when there is :-
 Continuous service of 5 yrs (not necessary incase
of death or disablement) Incase of death ,the amount
shall be paid to nominee or legal heir
Time limit- Within 30 days of gratuity becoming
payable
Maximum Amount-The gratuity payable to an
employee shall not exceed Rs. 20,00,000.

6. Amount of gratuity payable:
The employee roughly gets half a month’s Basic and Dearness
Allowance (DA) for every completed year of service as gratuity.
Maximum gratuity payable under act was 20,00,000

8. CONCLUSION