(2) If an employee nominates more than one person under sub-rule (1), he shall, in his nomination, specify the amount or share payable to each of the nominees in such manner as to cover the whole of the amount of gratuity that may be payable in the event of his death.
(3) Where an employee 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 employee in favour of a person not belonging to his family shall be invalid.
(4) If at the time of making a nomination the employee has no family, the nomination may be in favour of any person or persons, but if the employee subsequently acquires a family, such nomination shall forthwith be deemed to be invalid and the employee may be allowed to make a fresh nomination in favour of one or more persons belonging to his family.
(5) A nomination made by an employee may, at any time, be modified by him after giving a written notice to the trustees of his intention of doing so in Form No. 40B or in a form as near thereto as may be. If the nominee predeceases the employee, the interest of the nominee shall revert to the employee, who may thereupon make a fresh nomination in respect of such interest.
(6) 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.
Explanation : For the purposes of this rule, "family" means the employee's spouse, legitimate children, step-children, deceased son's widow, deceased son's legitimate children, deceased son's step-children, dependent parents, sisters, minor brothers and the dependent parents of the employee's spouse.
Extra Notes for Readers:
- Rule 101A was introduced by the Income Tax (2nd Amendment) Rules, 1971
Reference/Source: Check at Income Tax site for latest version of the Rules - link