Andhra Pradesh explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Chapter IV of the Code on Social Security (Andhra Pradesh) Rules, 2026 sets the gratuity timetable that an employer follows: the nomination in Form-I, the application in Form-II, the employer's reply in Form-III, the claimant's route to the competent authority in Form-IV, and appeal and recovery.
A gratuity process that is built around these dates can be reviewed in a payroll compliance audit.
The rules are the Code on Social Security (Andhra Pradesh) Rules, 2026, as notified by G.O.Rt.No.126 dated 7 July 2026. An employee nominates in Form-I, ordinarily within ninety days; applies for gratuity in Form-II, ordinarily within thirty days of it becoming payable; and the employer must reply in Form-III within fifteen days, fixing payment not later than the thirtieth day after receipt of the application. A refused or ignored claimant has one hundred eighty days to apply in Form-IV to the competent authority.
Notification and commencement
The rules are the Code on Social Security (Andhra Pradesh) Rules, 2026, as notified by G.O.Rt.No.126 dated 7 July 2026. Later amendments and State notifications under these rules should be checked in the State Gazette. Rule 1(2) says they come into force on the date of their publication in the Official Gazette; the four Labour Codes were brought into force from 21 November 2025. The compensation chapter is in our previous article.
Gratuity for a minor (rule 17)
The competent authority invests gratuity deposited for a minor nominee or heir in a term deposit with the State Bank of India or any nationalised bank. The rule defines "nationalised bank" by the First Schedules of the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980. The Central rule is rules 31 and 32 of the Central Rules.
Nomination (rule 18)
- Form and timing. A nomination is in Form-I, in duplicate, by personal service with receipt, registered post acknowledgement due, or electronically. An employee already employed for a year or more at commencement who has not nominated does so "ordinarily within ninety days"; an employee who completes one year of service later does so ordinarily within ninety days of completing it. A nomination filed late is still accepted and is not invalid merely because it was late.
- Employer's check. Within thirty days of receipt, the employer verifies the service particulars against the records, and returns the duplicate, attested by the employer or an authorised officer, against a receipt, keeping the other copy.
- No family at the time. An employee who had no family when nominating submits a fresh nomination within ninety days of acquiring one.
- Modification. A notice of modification, including where a nominee predeceases the employee, goes in duplicate in Form-I.
- Signature. The employee signs, or, if illiterate, puts a thumb impression in the presence of two competent witnesses who sign a declaration. It is submitted electronically or by registered post acknowledgement due.
- Effect. A nomination, fresh nomination or modification takes effect from the date the employer receives it.
Application for gratuity (rule 19(1))
The Central rule is rule 33. In Andhra Pradesh:
- An eligible employee, or a person authorised in writing, applies in Form-II to the employer, "ordinarily within a period of thirty days from the date the gratuity became payable". If the date of retirement is known, the employee may apply before thirty days of that date.
- An employee on fixed term employment is eligible if he renders service under the contract for at least one year; a period in excess of six months and less than one year is rounded off to one additional year.
- A nominee applies ordinarily within thirty days of the amount becoming payable to him (an application on plain paper with relevant particulars is also accepted); a legal heir, ordinarily within one year.
- Where gratuity became payable before the rules began, the limits run from commencement.
- A late application is entertained if sufficient cause for delay is shown, no claim is invalid merely because it was late, and any dispute on this goes to the competent authority.
- The application goes electronically, by personal service or by registered post acknowledgement due.
The employer's notice and payment (rule 19(2) and (3))
Within fifteen days of receiving an application, the employer:
- if the claim is admissible, issues a notice in Form-III specifying the amount payable and fixing a date for payment "not being later than the thirtieth day after the date of receipt of the application"; or
- if not admissible, issues a notice in Form-III giving reasons, with a copy to the competent authority.
The rule adds an explanation for determining gratuity: annual payments linked to performance or productivity, and not part of the remuneration under the terms of employment, are also excluded from wages, and so are reimbursement of medical expenses, stock option benefit or cash equivalent of stock award, crèche allowance, telephone and internet reimbursement and the value of meal vouchers. The employer may ask a nominee or legal heir for witnesses or evidence of identity or claim, and the time limit then runs from the date they are furnished. If payment is due at the employer's office, the date is re-fixed on a written request explaining why the payee cannot attend. The notice is served in person with receipt, by registered post acknowledgement due or electronically. A notice under section 56(2) is in Form-V. The gratuity is paid by demand draft, digital payment or credit to the bank account of the employee, nominee or legal heir.
Application to the competent authority and appeal (rules 19(4) to 19(13))
- Form-IV application. If the employer refuses a nomination or application, issues a notice with a lower amount or rejecting eligibility, or fails to issue the notice in time, the claimant may apply in Form-IV to the competent authority "within one hundred eighty days of the occurrence of the cause", with a copy to the opposite party. The authority may accept a late application for sufficient cause.
- Hearing. The competent authority issues a notice in Form-V to both sides to appear with documents and witnesses. A representative needs a letter of authority. If the employer is absent after due service without sufficient cause, the authority may decide ex parte, and if the applicant is absent it may dismiss; the order can be reviewed on good cause shown within thirty days, with not less than fourteen days notice of the rehearing.
- Finding and direction. If the applicant is entitled, the competent authority issues a notice in Form-VI directing payment "within a period of thirty days from the date of the receipt of the notice".
- Appeal. The memorandum of appeal under section 56(8) goes to the appellate authority specified by the State Government, with copies to the opposite party and the competent authority, stating the facts, the decision, the grounds and the relief, with a certified copy of the finding. The opposite party comments within fourteen days. If the appellate decision changes the amount, the competent authority issues a modified Form-VI notice with payment within fifteen days of receipt.
- Recovery. If the employer does not pay under the notice, the claimant applies in duplicate in Form-VII for recovery under section 129 (rule 19(13)).
The Central forms are listed in Forms IV to VI of the Central Rules; Andhra Pradesh employers use the State Forms.
Exempted establishments and the competent authority (rules 20 and 21)
Where an approved Gratuity Fund exists, rule 20 requires a Board of Trustees with equal numbers of employer and employee representatives, with the employer as Chairperson who holds a casting vote, meeting at least once in every three months. Rule 21 provides that the competent authority is appointed by notification from gazetted officers with experience in labour matters.
At a glance
| Step | Rule | Form and period as printed |
|---|---|---|
| Nomination | 18(1) | Form-I; ordinarily within ninety days |
| Employer's verification | 18(2) | Within thirty days |
| Application | 19(1) | Form-II; ordinarily within thirty days (heir: one year) |
| Employer's notice | 19(2) | Form-III within fifteen days; payment by the thirtieth day |
| Claimant's application | 19(4) | Form-IV within one hundred eighty days |
| Order to pay | 19(11) | Form-VI; thirty days |
| Recovery | 19(13) | Form-VII |
A worked example
Vizag Marine Supplies, an invented employer, receives a Form-II application from a retiring clerk on the first of a month. Within fifteen days the HR head sends a Form-III notice stating the amount and fixing a payment date within the thirtieth day. The clerk's earlier Form-I nomination had been verified and returned within thirty days of filing. Had the notice not arrived, the clerk would have had one hundred eighty days to apply in Form-IV to the competent authority.
Common lapses
- Not returning the attested duplicate of Form-I within thirty days.
- Issuing the Form-III notice after fifteen days.
- Counting excluded items such as meal vouchers or telephone reimbursement in the wage base.
- Paying in cash instead of the modes the rule lists.
Need help with gratuity processes?
Gratuity disputes usually begin with a missed notice or a wrong wage base. Our payroll compliance audit team can check your process against these rules and the forms.
Key takeaways
- Form-I nomination (ninety days), Form-II application (thirty days; heir one year), Form-III employer notice (fifteen days).
- Claimant's route: Form-IV within one hundred eighty days; order in Form-VI; recovery in Form-VII.
- Wage base excludes the items listed in the explanation to rule 19(2).
- Payment by demand draft, digital mode or bank credit.
Read next
- Code on Social Security (Andhra Pradesh) Rules, 2026: Employees' State Insurance and employee's compensation
- Code on Social Security (Andhra Pradesh) Rules, 2026: maternity benefit, nursing breaks and crèche
- Rule 33 of the Social Security Central Rules, 2026: application for gratuity and appeal
Disclaimer: Based on the State or Union territory rules named above, as notified under the Labour Codes and consulted on 4 October 2026. Later amendments, State notifications, fees and forms should be checked in the State Gazette and on the State labour department website. This article is general information, not legal advice; check the official text before acting.