Friday, 17 October 2014

The Payment of Gratuity Act 1972 Page 3

Superannuation and Retirement:
   ü  Gratuity is paid on superannuation or retirement.
   ü  Superannuation means that the employee has completed his age after which the employee has retired however retirement means that the employee retires from services before completion of age.

Payee of Gratuity:
   ü  Gratuity is paid to the employee on superannuation or retirement.
   ü  If the employee dies then gratuity is paid to his nominee.
   ü  If the employee has not given any nomination than gratuity will be paid to the family members of employee who are his legal representatives.

   ü  While making the payment of gratuity it is necessary to have nomination.
   ü  Every employee who joins services may give a nomination any time after one year of service.
   ü  Employee may appoint multiple nominees and he will fix their ratio.
   ü  Nominee will receive the amount of gratuity on the death of employee.
   ü  Nominee may be a relative of employee or he may be a friend of employee.
   ü  Employee may change his nomination at any time.
   ü  If the nominee is a minor person then the amount of gratuity will be deposited in a bank account and it will be paid to the nominee when he becomes major.

   ü  For making the payment to nominee or for depositing the amount in a bank the controlling authority will make provisions.

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