The Gratuity New compliance process is to be adhered.
SSCode Central Rules Gratuity Chapter Applicability
- Single‑state establishments: Governed by State Rules for gratuity. Continue following state‑specific notifications until State Labour Code Rules are notified.
- Multi‑state establishments: Governed by Central Rules. All gratuity settlements, notices, and prescribed forms must align with the Social Security (Central) Rules, 2026.
Chapter V – Gratuity Compliance Updates
| Old Form (PGA 1972) | New Form (SS Central Rules 2026) – Attached | Purpose |
| Form F | Form III | Nomination / Fresh Nomination / Modification of Nomination (mandatory for all employees). To be included in the New joiner induction kit. |
| Form I / J | Form IV | Application for Gratuity by Employee / Nominee / Legal Heir (mandatory for exits on/after 8 May 2026) |
| Form L | Form V | Notice for Payment or Rejection of Gratuity Claim (mandatory for settlements on/after 8 May 2026) Monthly Gratuity settlement details must be shared to enable preparation of Form V returns. Effective 21 November 2025, gratuity settlements for resigned employees are to be calculated on the new Core Wages definition under Section 2(y). If any settlement has been processed on the old wage basis, the differential amount must be recalculated on the Core Wages and paid to the employee. Such differential payments attract simple interest at 10% per annum, calculated from the date the gratuity became payable until the date of actual settlement. |
Process Changes
- Wages: New Wage Definition to be applied in arriving at the Gratuity Calculation
- Determination of gratuity: As per Section 56(2) of the SS Code, employers are required to calculate gratuity proactively, without waiting for an employee’s application. The current statutory ceiling is ₹20 lakhs. However, if a company’s established policy provides gratuity exceeding ₹20 lakhs, or extends gratuity to employees with one year or more of service, such policy must be maintained under Rule 124 of the SS Code, since it is more favourable than the statutory provisions.
- SSCode Display template to be updated and exhibited in the Notice board.
Key Conditions for Gratuity Nomination Form Collection
| Condition | Requirement |
| Submission timeline | – Employees already in service for 1+ year at commencement must submit Form‑III within 90 days. – Employees completing 1 year of service thereafter must submit within 90 days of completion. – Late submissions are valid; employer must accept them. |
| Mode of submission | Form‑III must be submitted in duplicate, either personally (with receipt), by registered speed post, or electronically. |
| Employer verification | Within 30 days of receipt, employer must verify service particulars, attest one copy, return it to employee (with receipt), and retain the other. Not for any department submission. |
| Aadhaar details | Employee must provide nominee’s Aadhaar details at the time of filing. |
| Fresh nomination | Employees without family at the time of nomination must file a fresh nomination within 90 days of acquiring family. |
| Modification of nomination | Any change (including nominee predeceasing employee) requires submission of modification notice in Form‑III in duplicate. |
| Signing requirements | – Employee must sign the form; valid e‑sign (Aadhaar OTP, DSC, DigiLocker) is accepted. – If illiterate: thumb impression in presence of two competent witnesses, who must also sign a declaration. |