Section 4A · compulsory insurance

(1) With effect from such date as may be notified in this behalf by the appropriate Government, every employer, other than an employer or establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), insure in the prescribed manner with the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956) or any other prescribed insurer his liability for payment on account of gratuity under this Act:
Provided that different dates may be appointed for different establishments or classes of establishments or for different areas. (2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who has already established an approved gratuity fund in respect of his employees and who wishes to continue such arrangement and every employer employing five hundred or more persons who establishes an approved gratuity fund in the prescribed manner from the provisions of sub-section (1).
(3) For the purpose of effectively carrying out the provisions of this section, every employer shall, within such time as may be prescribed, get his establishment registered with the Controlling Authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken the insurance specified in sub-section (1) or has established an approved gratuity fund specified in sub-section (2). (4) The appropriate Government may, by notification, make rules for giving effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of an approved gratuity fund and for the recovery by the Controlling Authority of the amount of gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom insurance has been effected under sub-section (1) or from the Board of Trustees of an approved gratuity fund.
(5) Where an employer fails to make any payment by way of premium towards insurance specified in sub-section (1) or by way of contribution towards an approved gratuity fund specified in sub-section (2), he shall be liable to pay immediately to the Controlling Authority the amount of gratuity due under this Act (including interest, if any, for delayed payment). (6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and, in case the offence is a continuing one, with a further fine which may extend to one thousand rupees for every day during which the offence continues.
Explanation.-In this section "approved gratuity fund" has the same meaning as in clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961).]