INSUBCONTINENT EXCLUSIVE:
Enhanced gratuity limit for private sector employees will kick in from March 29, 2018.
The Ministry of Labour and Employment has clarified that the enhanced limit of gratuity for the
private sector workers will be effective from March 29, 2018 only, in a notification issued on its website
The government in March had notified doubling of the limit of tax-free gratuity to Rs 20 lakh in the private sector
The Payment of (Gratuity) Amendment Bill, 2018 was passed by the Lok sabha and Rajya Sabha and received assent from the President on March
28, 2018. After implementation of the Seventh Pay Commission, central government employees had not just received salary raises but the
amount of their tax-free gratuity had also been doubled to Rs
The passage of the amendment bill paved way for private sector employees to avail tax-free gratuity up to Rs
20 lakh, as well.The ministry received a large number of representations from unions/organisations/individuals, through social media
websites and PG (public grievance) portal whereby they requested the ministry that the effective date of Payment of Gratuity (Amendment) Act
2018 should be January 1, 2016, instead of March 29, 2018 at par with the central government employees, further said the
notification. Implementation of the enhanced gratuity ceiling with retrospective effect would have been administratively difficult and
employers may not have sufficient liquidity to meet the arrears liabilities, said the Santosh Gangwar-led ministry. The Payment of Gratuity
Act, 1972 is applicable to employees who have completed at least five years of continuous service in an establishment of 10 or more
