Parliament passes bill to double tax-free gratuity to Rs 20 lakh

Parliament approved The Payment of Gratuity (Amendment) Bill on Thursday with Rajya Sabha giving its nod for the legislation, enabling the government to double the tax-free gratuity limit from Rs10 lakh to Rs 20 lakh for the central government employees.

Further, this will allow the government to increase the gratuity ceiling from time to time without amending the law. 

The Lok Sabha has already passed the Bill on March 15.

The bill also notifies the period of maternity leave as part of continuous service and proposes to empower the central government to notify the gratuity ceiling from time to time without amending the law.

The Payment of Gratuity Act, 1972, was enacted to provide for gratuity payment to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments.

It is applicable to employees, who have completed at least five years of continuous service in an establishment that has 10 or more persons. 

(With inputs from Agencies)