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LIC Group Gratuity Fund

The Payment of Gratuity Act, 1972 is a social security legislation in India that provides for the payment of gratuity to employees in recognition of their continuous service. Gratuity is a monetary benefit given by the employer to the employee as a token of appreciation for the services rendered by the employee during the period of employment.

Key features of the Payment of Gratuity Act include:

  • Applicability: The Act applies to establishments with ten or more employees on any day of the preceding twelve months.
  • Eligibility: Employees who have completed at least five years of continuous service in an establishment covered under the Act are eligible to receive gratuity.
  • Calculation of Gratuity: The gratuity amount is calculated based on the employee's last drawn salary and the number of years of completed service. The formula for calculating gratuity is specified in the Act.
  • Payment: Gratuity is payable at the time of retirement, resignation, superannuation, or death, whichever is earlier. It is the responsibility of the employer to pay gratuity to eligible employees.
  • Nomination: Employees are allowed to nominate one or more family members to receive the gratuity amount in case of their death.
  • Administration: The Act is administered by the Labour Department of the respective state governments or the Central Government, depending on the nature of the establishment.

The Payment of Gratuity Act aims to provide financial security and stability to employees after retirement or during unforeseen circumstances. It sets out the rights and obligations of both employers and employees regarding the payment of gratuity and ensures that employees receive fair compensation for their long-term service to an organization.

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