1.1 This policy establishes the framework for the computation, administration, and disbursement of gratuity to eligible employees in compliance with the Payment of Gratuity Act, 1972, as amended from time to time, and any applicable state-specific rules. Gratuity is a statutory retirement benefit payable to employees as a reward for long and meritorious service. This policy applies to all employees of the Organization across all establishments in India where 10 or more persons are employed or were employed on any day in the preceding 12 months, as mandated by Section 1(3) of the Act. The Organization shall maintain a gratuity fund through an approved insurance company or a Board-managed gratuity trust to ensure that gratuity liabilities are adequately funded at all times.

1.2 The HR department, in coordination with the Finance department and the Organization's approved gratuity insurer or trust administrators, shall be responsible for maintaining accurate records of employee service, computing gratuity entitlements upon eligibility events, processing gratuity claims within 30 days of the date on which the gratuity becomes payable as mandated by Section 7(3) of the Act, and ensuring compliance with all statutory filing, reporting, and display requirements under the Payment of Gratuity Act, 1972 and the Payment of Gratuity (Central) Rules, 1972. The Organization shall display an abstract of the Act and the rules in a conspicuous place at every establishment, in English and in the language understood by the majority of employees.

2.1 An employee becomes eligible for gratuity upon the superannuation, retirement, resignation, or termination of employment after completing not less than 5 years of continuous service with the Organization, as defined under Section 4(1) of the Payment of Gratuity Act, 1972. For the purpose of calculating continuous service, an employee who has worked for not less than 190 days in a year (in establishments working below ground in mines) or 240 days in a year (in all other establishments) shall be deemed to have completed one year of continuous service, as per Section 2A of the Act. In cases of death or disablement of the employee, the 5-year continuous service requirement is waived, and gratuity shall be payable irrespective of the length of service rendered. Service of more than 6 months in the final year shall be rounded up to one full year for computation purposes.

2.2 For the purpose of determining eligibility, continuous service shall include all periods during which the employee was in uninterrupted service, including periods of authorised leave (paid or unpaid), lay-off within the meaning of the Industrial Disputes Act, 1947, suspension pending inquiry (where the employee is not ultimately dismissed), and periods of absence due to temporary disablement caused by an accident arising out of and in the course of employment as provided under Section 2A of the Act. Breaks in service caused by sickness, accident, approved leave of absence, lock-out, or cessation of work not due to the fault of the employee shall not be treated as interruptions of continuous service. The HR department shall maintain detailed records of each employee's service history to ensure accurate determination of continuous service at the time of gratuity computation.

3.1 Gratuity for employees covered under the Payment of Gratuity Act, 1972 shall be calculated using the formula: Gratuity = (Last Drawn Wages x 15 x Completed Years of Service) / 26, where 'Last Drawn Wages' means the basic wages last drawn by the employee plus dearness allowance as defined under Section 2(s) of the Act, and 26 represents the number of working days in a month. For employees who are paid on a piece-rate basis, wages shall be computed on the basis of average daily wages for the last 3 months preceding termination, excluding overtime. The maximum gratuity payable under the Act shall not exceed Rs. 20,00,000 (Rupees Twenty Lakhs) as per the current statutory ceiling, or such higher amount as may be notified by the Central Government from time to time. Where the Organization's gratuity scheme provides a formula more favourable than the statutory minimum, the more beneficial computation shall apply.

3.2 In accordance with Section 4(6) of the Payment of Gratuity Act, 1972, gratuity payable to an employee may be forfeited, wholly or partially, if the employee's services have been terminated for any act of wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, to the extent of the damage or loss so caused. Additionally, gratuity may be wholly or partially forfeited if the employee's services are terminated for riotous or disorderly conduct or any other act of violence on their part, or if the services are terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by the employee during the course of employment. Any decision to forfeit gratuity shall be taken after due inquiry, communicated in writing to the employee with reasons, and shall be subject to legal review. The Organization shall ensure that forfeiture decisions comply strictly with the grounds specified in the Act and do not exceed the statutory limits.

4.1 Every employee who has completed one year of service shall make a nomination in Form F as prescribed under Rule 6 of the Payment of Gratuity (Central) Rules, 1972, designating one or more persons to whom gratuity shall be payable in the event of the employee's death. The nomination shall be submitted to the HR department within 30 days of completing one year of service. An employee with a family (as defined in Section 6 of the Act) shall nominate only a member or members of their family. An employee who has no family may nominate any person, but such nomination shall become invalid upon the employee subsequently acquiring a family. Nominations may be modified by the employee at any time by submitting a fresh Form F. The HR department shall maintain all nomination forms securely and ensure that each employee's nomination is current and valid.

4.2 As mandated by Section 7(3) and Section 7(3A) of the Payment of Gratuity Act, 1972, the Organization shall determine and pay the gratuity amount within 30 days from the date on which the gratuity becomes payable. If the amount of gratuity is not paid within the prescribed period, the Organization shall pay simple interest at such rate as may be notified by the Central Government from time to time (currently not less than the interest on provident fund) from the date on which the gratuity becomes payable to the date on which it is paid. The Payroll department shall include the gratuity payment in the employee's full and final settlement or process it as a separate payment within the statutory timeline. Gratuity shall be paid to the employee or, in the case of death, to the nominee(s) or legal heir(s), by cheque, demand draft, or electronic transfer.

5.1 The tax treatment of gratuity shall be administered in accordance with Section 10(10) of the Income Tax Act, 1961. For government employees, the entire gratuity amount is exempt from income tax. For non-government employees covered under the Payment of Gratuity Act, 1972, the gratuity exemption shall be the least of the following: the actual gratuity received, the statutory ceiling of Rs. 20,00,000 (or such higher amount as notified), or 15 days' salary based on the last drawn salary for each completed year of service or part thereof exceeding 6 months. Any gratuity amount exceeding the exemption limit shall be taxable as salary income in the year of receipt. The Payroll department shall compute the taxable and exempt components of gratuity for each eligible employee and apply appropriate TDS deductions where applicable. The Organization shall comply with all statutory filing and reporting obligations related to gratuity under the Act, the Income Tax Act, and any applicable state rules.

5.2 The Organization shall maintain all gratuity-related records, including eligibility computations, payment calculation worksheets, payment receipts acknowledged by the employee or nominee, nomination forms (Form F), modification records, trust financial statements, and insurance policy documents, for a minimum of 8 years from the date of the gratuity event or for such longer period as may be required by applicable law. The Controlling Authority appointed under the Act shall have access to such records upon request. This policy shall be reviewed at least annually by the policy owner in consultation with Legal Counsel and the Finance department to incorporate any changes in the statutory gratuity ceiling, amendments to the Payment of Gratuity Act, 1972 or the rules thereunder, changes in the income tax exemption limits, or directions from the Controlling Authority. Amendments shall be communicated to all employees within 14 calendar days of the effective date.