NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY

NEW DELHI

RULES OF THE NIPFP EMPLOYEES’ GATUITY FUND

(As approved by the Governing Body on 20th February, 1986)

SECTION – I

Definition, Eligibility and Requirements for Membership

1. Definitions:

In these Rules, where the context so admits, the masculine shall include the
feminine, the singular shall include the plural and the following words and
expression shall, unless repugnant to the context, have the following meanings:

i. “Institute” shall mean the National Institute of Public Finance and Policy
and subject to the prior approval of the Commissioner of Income Tax
shall include any society or body which may, by amalgamation or
otherwise, take over the whole or substantially the whole of the work of
the Institute and which may enter into a Deed in such a form as the
Trustees shall require, undertaking to continue the obligations of the
Institute under these presents and releasing the Institute from all further
liabilities thereof.

ii. “Scheme or Fund” shall mean the National Institute of Public Finance
and Policy Employees’ Gratuity Scheme described in these Rules.

iii. “Rules” shall mean the Rules of the Scheme as set out below and as
amended from time to time.

iv. “Trustees” shall mean the Trustees for the time being of the Scheme.

v. “Employees” shall mean regular employees of the Institute and shall be

deemed to include the Director of the Institute but shall exclude persons
appointed on a contract basis unless the terms of the contract provide
for payment of any gratuity.

vi. “Member” shall mean an employee who has been admitted to the
membership of the Scheme.

vii. “Nominee” shall mean the person nominated by the member to receive
the benefits in the event of his death.
 viii. “Effective Date” in relation to the Scheme shall mean February 20, 1986
the date from which the Scheme takes effect.

ix. “Normal Retirement Date” shall mean in respect of each member the
date on which he completes the age of sixty years [fifty eight years for
employees appointed after 27th January 1988].

x. “Qualifying Service” shall mean continuous service of not less than five
years including periods of authorised leave.

xi. “Service” shall mean continuous service rendered by the Member to the
Institute including periods of authorised leave for the purpose of the
Scheme a period of 6 months and above shall be reckoned as one year.

xii. “Salary” shall mean gross salary f the member inclusive of dearness
allowance but shall not include commission, house rent allowance, city
compensatory allowance, bonus, overtime or any emoluments of a
variable or contingent nature.

2. The Trustees to act for the Institute and Members

The trustees will act for and on behalf of the Institute and members in any
matter relating to the Scheme and every act carried out by the Trustees shall be
binding on the Institute and the members, insofar as settlement of gratuity dues is
concerned.

3. Eligibility

a. The employees who are in the following category shall be eligible to

participant in the Scheme

“Regular employees who are aged not less than 18 years and not more
than 65 years”.

Employees in the above category who are in the service of the Institute on the
Effective Date and who have already put in five years of continuous service in the
Institute shall join the Scheme as from that date. Present employees who are not in
the above category on the Effective Date and employees appointed by the Institute
after the Effective Date shall join the Scheme on the date on which they become
eligible.

b. No member shall withdraw from the Scheme while he is still an

employees within the category stated above
4. Evidence of age

Evidence of age of every employee satisfactory to the Institute shall be

furnished before he is admitted to the Scheme and if the age of the member is
conclusively proved later to have been incorrectly stated in the evidence submitted,
the Institute shall make appropriate adjustment in the benefits having regard to its
normal practice.

SECTION II

CONTRIBUTIONS

5. Contributions

These shall be paid by the Institute to the Trustees, in respect of each member,
the contributions mentioned in sub paragraph (I) below annually, in advance on the
date of entry of the member into the Scheme and by the 31st March of each Financial
Year, and the contributions mentioned in sub-paragraph (ii) below in one lump sum
on the date of entry or in not more than five annual installments commencing from
the date of entry into the Scheme.

i. Ordinary Annual Contribution: The ordinary annual contribution shall be such

amount as shall be determined and recommended by a qualified actuary for
securing the benefits hereinafter described. The contribution shall be
expressed as a percentage of the salary of each member and may vary from
time to time on the basis of an evaluation of the benefits to be made at
intervals of not more than six years. The contributions will be paid throughout
the future services of the members unless specified otherwise in the Rules.

ii. Initial contribution: The Institute may pay any sums by way of initial
contribution in respect of members relating to their past service with the
Institute as shall be determined and recommended by a qualified actuary for
securing the benefits relating to such past service and on paying such sums
shall advise the Trustees as to their allocation to all or specified members.

Provided that the contributions payable by the Institute in any year in respect of
any year in respect of any member in terms of sub-paragraph (I) above shall
not exceed 8-1/3% of the salary, paid to the member during the year and that
the initial contribution referred to in sub-paragraph (ii) above shall not exceed 8-
1/3% of the salary paid to the member for each year of his past service with the
Institute. Provided further that if the contributions are not sufficient to secure
full benefits as described below, the benefits will be appropriately scaled down.
 SECTION – III

BENEFITS

6. Benefits on Retirement at or After Normal Retirement Date, Early Retirement

Due to ill – Health and Death while in service after Normal Retirement Date:

a. Upon retirement of a member on or after Normal Retirement Date or

upon death whilst in service after Normal Retirement Date or upon
retirement owing to ill-health or incapacitation, the benefits payable will
be equal to fifteen days salary for each completed year of service,
subject to a maximum of fifteen months salary and subject further to a
ceiling of Rs.1,00,000* per individual member. The salary drawn
immediately before retirement or death or termination of service shall be
the basis for working out the gratuity due.

b. This benefit will depend on a member’s having put in the qualifying

service.

Provided that this sub-rule shall not apply to the Director who will be
entitled to gratuity irrespective of the period of his service.

7. Benefits on Death before Normal Retirement4 Date:

Upon the death of a member whilst in service before normal retirement date,
the benefit payable will be equal to fifteen days salary as on the date of death for each
year of his service, subject to a maximum of fifteen months’ salary of Rs.1 ,00,000*
whichever is less. The requirement of a period of qualifying service shall not be
applicable in the event of the death of a member whilst in service.

8. Benefits on leaving Service

Upon a member leaving the service of the Institute on his own free will after
completion of five years of service the benefits payable will be equal to fifteen days’
salary as on the date of leaving service for each year of service, subject to a
maximum of fifteen months’ salary. The member will not be entitled to any benefits if
he leaves the service before completing five years of service. He will not also e
entitled to any benefits for the period during which he was on leave without pay or
deputation or foreign service, unless the organisation which has borrowed his service
contributes to the Gratuity Fund.
_____________________________________________________________
* maximum ceiling since revised from Rs.1,00,000/- to Rs.3,50,000/-
9. Forfeiture of Gratuity:

a. Gratuity shall be wholly forfeited in case of termination of service of the

member (a) for riotous or disorderly conduct or any other act of violence
on his part of (b) for any act which constitutes an offense involving moral
on turpitude provided such offence is committed by him in the course of
his employment.

b. In case of termination of service for any act, willful omission or

negligence of the member causing any damage or loss to or destruction
of property belonging to the Institute gratuity payable under the Scheme
shall be forfeited to the extent of the damage or loss so caused.

10. The gratuity payable in respect of any member under the scheme shall be paid
only in lump sum.

SECTION – IV

Miscellaneous Provisions

11. Restraint on Anticipation or Encumbrance:

The benefit accrued under the Scheme are strictly personal and cannot be
assigned, charged or alienated in any way.

12. Except as provided in these Rules, no member or his Nominee shall have any
legal claim, right or interest in the Scheme. PROVIDED ALWAYS THAT the Trustees
shall administer the Scheme for the benefit of the members and their Nominees in
accordance with the provisions of these Rules.

13. Jurisdiction:

All benefits under the Scheme shall be payable only in India. Should anything
contained in these Rules, or in any amendment made thereof be repugnant to any
provision or provisions of the Income-Tax Act, 1961, or the Income Tax Rules, 1962, it
shall be ineffective to the extent of such repugnance. Any such repugnance shall be
removed by the Trustees if so directed by the Commissioner of Income Tax.

14. Income Tax and other taxes

a. In any case where the Institute or the Trustees are liable to account to the
Income Tax authorities for income tax on any payment made under the rules,
the Institute or the Trustees as the case may be shall deduct a sum equal to
such tax from any such payment made and shall not be liable to the members
for the sum so deducted.
b. If the Gratuity Fund and Scheme for any reason cases to be approved by the
Commissioner of Income Tax, the Trustees shall nevertheless remain liable
totax on any benefits paid to any Member or his Nominee.

15. Nomination:

a. Every member shall make a nomination conferring on one or more persons the
right to receive the benefits hereunder in the event of his death before the
benefits become payable. Such a nomination shall be made according to the
form give in the Appendix.

b. Where a member has a family at the time of making a nomination, the

nomination shall be in favour of one or more persons belonging to his family.
Any nomination made by such a member in favour of a person or persons not
belonging to his family shall be invalid.

c. If, at the time of making a nomination, the member has no family, the
nomination may be in favour of any person or persons but if the member
subsequently acquires a family, such nomination shall forthwith be deemed to
be invalid and the member may make a fresh nomination in favour of one or
more persons belonging to his family.

d. A nomination made by a member may, at any time, be modified by him after

giving a written notice to the Trustees of his intention of doing so. If the
nominee predeceases the member, the interest of the nominee shall revert to
the member, who may thereupon make a fresh nomination.

e. A nomination or its modification shall take effect to the extent it is valid on the
date on which it is received by the Trustees.

f. If a Nominee not appointed and the member does not have a family, then the
benefits shall lapse to the fund.

Explanation: For the purpose of this Rule “family” means the employee’s
spouse, legitimate children, step-children and dependent parents, sisters and
minor brothers.

16. The gratuity due to an employee shall be paid to him or his nominee within 30
days of his retirement or death or the termination of his service otherwise. If, for any
reason the disbursement of the gratuity is delayed beyond 30 days the Fund shall pay
interest on the gratuity due at 12 per cent per annum.

Provided that if the delay occurs by reason of the nomination being invalid, the
interest shall be payable only after 30 days of a valid claim being made by the
concerned legal heirs and successors.
17. Interpretation of Rules:

It shall be a condition of membership of the Scheme that on any question

arising on any point of interpretation of these Rules or any point relating to admission
of new member and cessation of membership, the decision of the Trustees shall be
final. If the decisions has any bearing on the provisions of Part C of the fourth
schedule of the Income Tax Act, 1961 or the Rules made thereunder it shall be
forthwith reported to the Commissioner of Income Tax and if the Commissioner of
Income Tax so requires, the Trustees shall review the decision.

Appendix
The Trustees
_____________

______________

______________

Dear Sirs,

I, _ __________________________________ a Member of the NIPFP

Employees’ Gratuity Fund hereby agree to abide by the Rules of the said Fund and do
also hereby appoint in terms of rule 15 of the Rules of the NIPFP Employees’ Gratuity
Fund, the nominee/s mentioned hereunder to receive the benefits, payable under the
Rules, in the event of my death before the amount becomes payable or having
become payable has not been paid.

I hereby direct that the benefits under the Rules, payable in respect of me shall
be paid to the said nominee/s in the proportion indicated against their respective
names as given below:

S.No. Name in full with full Relationship Age of Proportion by

Address of nomi nee/s with the nominee/s which gratuity
Member (total benefits)
Will be shared
by each nominee

1.___________________________________________________________________

2.___________________________________________________________________

I hereby certify that the person(s), mentioned herein above is/are my wife/
children/lawfully adopted child/dependent parents/husband.

I hereby declare that I have no family and should I acquire a family hereafter
the appointment of nominee made hereunder should be deemed as cancelled.

My father/mother/parents/sister(s) minor brother(s) is/are/not dependent on me.

My husband’s father/mother/parents is/are/not dependent on me. I also

declare that this appointment of nominee/s made herein shall have the effect of my
revoking the appointment of nominee/s made by me earlier.
I give below the particulars about myself

1. Full Name :____________________________________

2. Date of birth_______________3.Sex_________ 4. Religion____________

5. Father’s name________________________

6. Husband’s name___________________ [for married women only]

7. Marital status:______________________[whether married, unmarried, widow

or widower]

8. Permanent address:__________________________________

___________________________________________________

Signed at__________this_______days of____________________

TWO WITNESSES TO THE SIGNATURE:

Name Address Signature

1.

2.

_______________________________________________________________

Certified that the above appointment of Nominee has been signed by Shri/
Smt.____________________ before me after he/she has read the entries/ the entries
have been read to him/her by me and that the said appointment of nominee(s) is
recorded under the Scheme on_______________________________.

Place: Signature of Trustees/s

For Self and Co-Trustees
Date: of NIPFP Gratuity Fund