Please read "with effect from the date as may be notified by the appropriate government" which means that this section pertaining to compulsory insurance shall have effect from the date on which the government notifies it as applicable.

From India, Kannur
Moreover, in my opinion even if it is notified by the respective Govt it may not be compulsory for employers having less than 500 employees. Regards M.V.Kannan
From India, Madras
For that separate notification will have to be issued by the appropriate government. In the absence of such notification exempting establishments having more than 500 employees from the operation of section 4A, it shall be construed that such establishments should also have to get its gratuity fund insured.

From India, Kannur
Dear Sir, First You go through the Payment of Gratuity Act clearly define it is not a part of employee salary and not shown in payslip please dont blabbering and give us a wrong direction
From India, Coimbatore

You have shed correct light on the issue by highlighting sections and subsection of the concerned Act.
many people are confused as to exact meaning of CTC.Concept of CTC is not understood.
some companies include gratuity as part of CTC.
It is not to be shown on salary slip as a deduction as this amount does not affect take home pay of employee.
Using the word blabbering is inappropriate.

From India, Pune
Madhu I also agree that professionals must exercise restraint while offering comments. Your views are appreciated by professionals. Kindly ignore inappropriate comments & continue to offer your valuable inputs.

From India, Madras
Thanks all learned friends for your input.........
Really we all Professional has started accepting this that Payment of Gratuity is a part of our annual salary package or CTC.
Its my observation in this forum that many of friends don't even bother to open Bare Act book at least for reference.
About Section 4 of The Payment of Gratuity Act, 1972 .......... till date this section do not give justice to many teachers all over India as many School - Collage Governing Body/Trusts/NGOs are not registered under S & E Act.
The provision of Section 4 became applicable to employee when of an establishment, shop or factory where 10 + employees are working.
This is a Conceptual Conflict among new generation HR Professionals.
Regarding insurance clause ..... this had been amended in the year 1987.
Compulsory Insurance -
The Payment of Gratuity (Amendment) Act, 1987 has prescribed provisions for
compulsory insurance for employer’s liability for payment towards the gratuity under the
Act from the Life Insurance Corporation of India establishment under the Life Insurance
Corporation of India Act,1956 or any other prescribed Insurer.
However, employer of an establishment belonging to or under the control of the Central
Government or the State Government are exempted from operations of these provisions.
(Section 4A)

From India, Mumbai
After a gap of almost 1 year and 9 months, the thread is active again with a comment by Rainbow123. If I am not blabbering, (let me take the word of Hramuthan because I am not sure I am write in advising you all, but would believe that I follow the Act (bare Act), interpretations by courts by referring to LLR kind of law reports and cross check with Labour department officials in case of doubt) I would say that Payment of Gratuity Act is applicable to Factories, plantations, mines etc without reference to the number of employees employed. It is also applicable to other establishments like shops and commercial establishments within the purview of the state's Shops and Commercial Establishments wherein at least ten employees were/ are employed. A school which is not under the control of the government either by way of service rules and payment of salaries, will also come under the fold of this Act. However, till the end of 2009 teachers were not eligible to get gratuity and this was supported by the decision of the Apex Court in Ahmedabad Private Teachers‟ Association Vs. Administrative Officers and Others, (2004 (1) SCR 470) in which the court described that teaching was a noble profession and would not come under the purview of Payment of Gratuity Act. But in 2009 the definition of employee was amended and the qualifying phrases of skilled, semi skilled etc were removed. Thereafter the teachers have been brought under the Payment of Gratuity Act.
Regarding compulsory insurance of gratuity fund, I am still unable to see anything wrong in my previous post that this is effective from the date on which the respective state government will notify when section 4A should be made applicable. Therefore, if any state has not notified the date there is no need of investing the gratuity fund in LIC or other insurance company, as the case may be.

From India, Kannur

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