Latest Amended Payment of Gratuity Bill Ceiling Limits


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The Amended Payment of Gratuity Bill, 2017 that was geared in the Lok Sabha during its winter session is scheduled to go passed in the upcoming Parliament Budget Session 2018.

The Bill demands amendment of the Payment of Gratuity Act, 1972 so as to make the formal sector employees get a tax-free gratuity of 20 lakh rupees. Now the formal sector workers with 5 or extra years of service are entitled to Rupees ten lakh tax-free gratuity up on leaving the job or simply after superannuation.

The Bill lets the central govt. to intimate the time of maternity leave that will be allowed to the female workers and the gratuity limit that can be obtained by the staffs from time to time.

Thus the Bill establishes to hike the time of present 12 weeks so given under the Maternity Benefits Act 1961, to like period as might be informed by the Centre.

The Payment of Gratuity Act, 1972 permits for the payment of gratuity to workers in any organization, factory, mining companies, oil field, plantation, harbor port, railways, company, firm, or shop having role of 10 plus workers. Staffs are given gratuity if they have worked for at least 5 years of continuous service when getting terminated.

Gratuity is a benefit gained by a worker for the services provided to a company. This payment is offered when he/she retires, resigns or terminated. The gratuity amount is driven as per the formula- finally withdrawn salary X number of ended years. Rupees ten lakhs is the ceiling limit of gratuity determined in the year 2010. Byt, the 7th Central Pay Commission implemented the ceiling limit increase from then Rs.10 Lakhs to Rs.20 Lakhs for employees deputed under Central Government.

Given, treating the factors such as rise in wage, inflation & future Pay Commission, the govt. shall notice the ceiling limit of the gratuity to be remitted to the workers involved in the public & private sector.