Gratuity Claim Form I (Employee Application)

A Gratuity Claim Form I (Employee Application) in India captures the information the relevant authority needs for the matter it concerns and creates a dated written record of what was submitted.

The Payment of Gratuity Act 1972 applies to factories, mines, oilfields, plantations, ports, railway companies, shops, and establishments employing ten or more persons. Once covered, an establishment remains under the Act even if its workforce subsequently falls below ten. The gratuity formula under Section 4(2) is: Last drawn monthly wages × (15/26) × Number of completed years of service. The multiplication factor 15/26 represents fifteen days' wages calculated on the basis of twenty-six working days per month (treating four Sundays as non-working). The Supreme Court in Mettur Beardsell Ltd. v. Regional Labour Commissioner (1998) interpreted 'completed years' to include any fraction of a year exceeding six months as a full year.

The Payment of Gratuity (Amendment) Act 2018 raised the maximum gratuity ceiling from ₹10 lakh to ₹20 lakh, effective 29 March 2018. The Central Government is empowered to revise this ceiling by notification. Government employees are not subject to the ₹20 lakh ceiling — they receive full statutory gratuity under their respective service rules.

Section 10(10) of the Income Tax Act 1961 grants tax exemption on gratuity received: for employees covered under the Payment of Gratuity Act, the exemption is the least of: (a) actual gratuity received, (b) fifteen days' wages for each year of service based on the last drawn salary, or (c) ₹20 lakh. Gratuity received by a nominee in death cases is fully exempt from income tax with no monetary ceiling under Section 10(10)(i).

The employer must insure gratuity liability under an approved gratuity fund or group gratuity insurance policy — major life insurance companies (LIC, SBI Life, HDFC Life) offer group gratuity products. Section 4A of the Act requires employers with a gratuity liability above a specified threshold to either maintain a recognised gratuity trust (approved under Section 40A(7) of the Income Tax Act) or obtain group gratuity insurance. An employer who willfully fails to pay gratuity faces imprisonment of three months to one year and fine under Section 9(2) of the Act.

The Controlling Authority for gratuity disputes is the Labour Commissioner, Assistant Labour Commissioner, or Regional Labour Commissioner notified by the State Government or Central Government (for central sphere establishments). Appeals against Controlling Authority orders lie to the Appellate Authority — the District Court or Additional District Judge — under Section 7(7) of the Act.

Gratuity Claim Form I must be filed in India whenever an employee's service with an employer ends in circumstances that give rise to a statutory gratuity entitlement under the Payment of Gratuity Act 1972.

Superannuation — reaching the employer's designated retirement age, typically 58 or 60 years — is the most common trigger. The gratuity becomes due on the last working day before superannuation, and Form I should be submitted to the employer within 30 days of that date under Rule 7(1) of the Payment of Gratuity (Central) Rules 1972.

Resignation after completing five or more years of continuous service with the same employer triggers gratuity entitlement. Service must be 'continuous' within the meaning of Section 2A of the Act — periods of absence due to illness, accident, authorised leave, lockout, or lay-off count toward continuous service. Workers in seasonal establishments have a different continuous service calculation.

Termination of service (other than for gross misconduct as specified in Section 4(6) of the Act) entitles the employee to gratuity if five or more years of continuous service have been completed. Retrenchment, closure of the establishment, and termination for economic reasons are all covered triggers. An employer who terminates employment to avoid paying gratuity faces criminal liability under the Act.

Death of the employee during service — regardless of how long the employee has worked, even from the first day — entitles the nominee to claim gratuity. In death cases, the nominee files Form J (not Form I). If no nomination is on record, the legal heirs must file Form H and produce a succession certificate or legal heir certificate. The five-year minimum service requirement does not apply to death and disablement cases.

Permanent disablement due to accident or disease rendering the employee unfit for the duties of their post also triggers gratuity payment regardless of the length of service. The disablement must be certified by a medical authority competent to do so under applicable rules.

For employees working in central sphere establishments (mines, oilfields, railways, ports, central government undertakings), the Central Payment of Gratuity (Central) Rules 1972 apply. For employees in state sphere establishments (shops, factories, plantations in states), the respective state rules apply, which may have minor procedural variations.

Gratuity Claim Form I must contain accurate and complete information to allow the employer and, if disputed, the Controlling Authority to verify eligibility and calculate the correct payment without delay.

Employee identification provides the full name, employee code or designation, department, the name and address of the establishment, and the employee's address for communication. The employee's bank account number, IFSC code, and bank name are now required for direct bank transfer of the gratuity amount, consistent with the government's direct benefit transfer policy.

Date of commencement of employment is the date from which continuous service is calculated. Employees who have changed roles, transferred between group companies, or had service interruptions must provide supporting documents — appointment letter, transfer orders, service book — establishing the continuity of service. Section 2A of the Payment of Gratuity Act provides that an employee shall be deemed to be in continuous service during periods of authorised absence, illness, accident, lay-off, strike, or lockout.

Date of cessation of employment specifies the last working day, which determines both the eligibility for gratuity and the start of the thirty-day payment clock. For death cases, the date of death is the cessation date.

Reason for cessation must specify the ground: superannuation, retirement, resignation (confirming more than five years' service), retrenchment, termination (other than for gross misconduct), death, or disablement. For disablement, a medical certificate from a competent medical authority must be attached. For resignation, evidence of the resignation letter and acceptance by the employer (or expiry of notice period) is required.

Calculation of gratuity: While the employer is responsible for calculating the amount under the statutory formula, the employee's Form I should include the last drawn basic salary plus dearness allowance (which constitutes 'wages' under Section 2(s) of the Act), the number of completed years of service (and whether any fraction exceeds six months, rounding up to a full year under the Mettur Beardsell ruling), and the employee's own computation of the amount due. Providing the calculation prevents the employer from understating the liability.

Nominee details for death cases: Where the claimant is a nominee filing after the employee's death, Form J must be used (not Form I). Form J requires the nominee's relationship to the deceased employee, the original nomination form (Form F) reference, the employee's date of death, and the death certificate.

Signature and date: The employee must sign Form I before submitting it to the employer's HR or establishment department. For illiterate employees, a left-hand thumb impression in the presence of two witnesses is accepted. The date of submission is critical for calculating whether the employer responds within the fifteen-day notice period and pays within the thirty-day payment period under the Act. The forms-legal.com Gratuity Claim Form I (Employee Application) template covers the mandatory elements under Industrial Disputes Act, 1947.