Section 4A. Compulsory insurance.

(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:

Provided that different dates may be appointed for different establishments or class of establishments or for different areas.

(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement, and every employer employing five hundred or more persons who establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).

(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).

(4) The appropriate Government may, by notification, make rules to give effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of the approved gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has been taken under sub-section (1), or as the case may be, the Board of Trustees of the approved gratuity fund.

(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of contribution to an approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.

(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.

Explanation.—In this section “approved gratuity fund” shall have the same meaning as in clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961).]

View Act Footnotes

Note: In the legacy archives, footnotes are grouped by original PDF page numbers rather than by section.

Page 2

1. Ins. by Act 26 of 1984, s. 2 (w.e.f. 18-5-1984).
2.16th September, 1972, vide notification No. S.O. 601(E), dated 16th September, 1972, see Gazette of India, Extraordinary, PartII, sec. 3(ii).
3. Subs. by Act 26 of 1984, s. 3, for clause (c) and the Explanations (w.e.f. 18-5-1984).*. Vide notification No. S.O. 3912(E), dated 30th October, 2019, this Act is made applicable to the Union territory of Jammu andKashmir and the Union territory of Ladakh.

Page 3

1. Subs. by Act 47 of 2009, s. 2, for clause (e) (w.e.f. 3-4-1997).
2. Subs. by Act 22 of 1987, s. 2, for “and the widow” (w.e.f. 1-10-1987).
3. The proviso omitted by s. 2, ibid. (w.e.f. 1-10-1987).
4. Subs. by Act 12 of 2018, s. 2, for clause (k) (w.e.f. 29-3-2018).

Page 4

1. Subs. by Act 25 of 1984, s. 2, for clause (r) (w.e.f. 1-7-1984).
2. Ins. by Act 26 of 1984, s. 4 (w.e.f. 18-5-1984).
3. The words “imposing a punishment or penalty or” omitted by Act 22 of 1987, s. 3 (w.e.f. 1-10-1987).

Page 5

1. Explanation inserted by Act 22 of 1987, s. 3 (w.e.f. 1-10-1987).
2. Subs. by Act 12 of 2018, s. 3, for “twelve weeks” (w.e.f. 29-3-2018).
3. Subs. by Act 22 of 1987, s. 4, for the second proviso (w.e.f. 1-10-1987).

Page 6

1. Subs. by Act 25 of 1984, s. 3, for “an employee employed in a seasonal establishment” (w.e.f. 1-7-1984).
2. Explanation inserted by Act 22 of 1987, s. 4 (w.e.f. 1-10-1987).
3. Subs. by Act 15 of 2010, s. 2, for “three lakhs and fifty thousand rupees” (w.e.f 24-5-2010).
4. Subs. by Act 12 of 2018, s. 4, for “ten lakh rupees” (w.e.f. 29-3-2018).
5. Subs. by Act 25 of 1984, s. 3, for “shall be wholly forfeited” (w.e.f. 1-7-1984).
6. Sub-section (7) omitted by Act 34 of 1994, s. 3 (w.e.f 24-5-1994).
7. Ins. by Act 22 of 1987, s. 5 (w.e.f. 1-10-1987).

Page 7

1. Section 5 renumbered as sub-section (1) thereof by Act 26 of 1984, s. 5 (w.e.f. 18-5-1984).
2. Ins. by s. 5, ibid. (w.e.f. 18-5-1984).
3. Ins. by Act 22 of 1987, s. 6 (w.e.f. 1-10-1987).

Page 8

1. Subs. by Act 22 of 1987, s. 7, for sub-section (3) (w.e.f. 1-10-1987).
2. The Explanation omitted by Act 25 of 1984, s. 4 (w.e.f. 1-7-1984).
3. Ins. by s. 4, ibid. (w.e.f. 1-7-1984).
4. Subs. by s. 4, ibid., for clause (c) (w.e.f. 1-7-1984).
5. Clause (c) re-lettered as clause (d) thereof by s. 4, ibid. (w.e.f. 1-7-1984).
6. Clause (d) re-lettered as clause (e) thereof by s. 4, ibid. (w.e.f. 1-7-1984).

Page 9

1. Subs. by Act 25 of 1984, s. 4, for “nominee” (w.e.f. 1-7-1984).
2. The proviso ins. by s. 4, ibid. (w.e.f. 1-7-1984).
3. Ins. by s. 5, ibid. (w.e.f. 1-7-1984).

Page 10

1. Subs. by Act 22 of 1987, s. 8, for “at the rate of nine per cent. per annum” (w.e.f. 1-10-1987).
2. The provisos inserted by s. 8, ibid. (w.e.f. 1-10-1987).
3. Subs. by s. 9, ibid., for “one thousand rupees” (w.e.f. 1-10-1987).
4. Subs. by s. 9, ibid., for certain words (w.e.f. 1-10-1987).
5. Subs. by s. 9, ibid., for “three months” (w.e.f. 1-10-1987).

Page 11

1. Subs. by Act 34 of 1994, s. 4, for “Presidency Magistrate or a Magistrate of the first class” (w.e.f. 24-5-1994).
2. Ins. by Act 25 of 1984, s. 6 (w.e.f. 1-7-1984).