Section 4(3) Of The Payment Of Gratuity Act ,1972

Section 4(3) of the Gratuity Act in some books speaks of Maximum ceiling of Rs. 10 Lakhs while in some books it says about the amount of gratuity payable to an employee shall not exceed 20 months' wages. Which aspect is true ?

Dear,
As per gratuity act there is only condition of the amount of Gratuity shall not exceed Rupees Ten Lakhs.

Dear CPbanga,
As of now, the ceiling of Gratuity is Rs. 10 lakhs but it is in consideration by government to increase it upto Rs. 20 Lakhs which will be released soon by notification.

Dear Banga,

Whenever we go through any book on Law containing the bare Act and the Rules framed under the same, we have to first check the year of publication of the book and next the relevant foot note given under the section to which reference is to be made. Old editions will not have later amendments.

When the Act was enacted in the year1972, the maximum amount of gratuity payable to an employee u/s 4(3) stood at any amount not exceeding twenty months wages.

The Act was subsequently amended in the years 1984 (twice),1987, 1994, 1998, 2009 and 2010 respectively.

The maximum amount of gratuity payable to an employee u/s 4(3) of the Act was also raised from time to time as follows:

a) 1984 --- From 20 months wages to Rs.50,000-00

b) 1994 --- From Rs.50,000/= to Rs. 1,00,000-00

c) 1998 --- From Rs 1,00,000/= to Rs.3,50,000-00

d) 2010 --- From Rs.3,50,000/= to Rs.10,00,000-00

Therefore, the current maximum amount of gratuity is Rs10 lakh only.