n NISM Certifications
XVII NISM Series XVII
Medium

Gratuity is paid in a lump sum to employees upon termination of employment, as mandated by law.

Practice question from NISM Series XVII- Retirement Adviser Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    As an annuity

  2. B

    1/3rd is commuted and the rest used to purchase an annuity

  3. In a lump sum

    Correct answer

  4. D

    It is credited to the EPFO account each year

Why this is the answer

The Payment of Gratuity Act specifies lump-sum payment after continuous service of at least five years.

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