How is gratuity paid in India?

The employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes billed to the person to whom the gratuity is allocated.

If the amount of gratuity payable under the section is not paid by the employer within the period specified, from the date on which the gratuity becomes payable he will have to pay simple interest on it at the rate not exceeding the rate stipulated by the Central Government.

Gratuity should be paid in cash, or if so desired by the payee, by demand draft or bank cheque to the eligible employee, nominee or legal heir.

However, gratuity payable to an employee shall be wholly forfeited if:

• The service of such employee has been terminated for his lawless or disorderly conduct or any other act of violence on his part; or
• The service of such employee is terminated for any act which constitutes an offence involving moral turpitude provided that such offence is committed by him in the course of his employment.