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Good news for employees: Tax-free gratuity limit may be raised to Rs 20 lakh in Budget 2018

Source | www.msn.com : By Nithya Nair

In a move that is expected to provide more benefits to the salaried class, the Payment of Gratuity (Amendment) Bill 2017 is likely to be passed in the Union Budget 2018. The bill proposes to empower the Central government to allow gratuity limits of employees in both the government and private sector to be revised.

Through the bill, the government wants to provide tax-free gratuity of Rs 20 lakh to organised-sector workers at par with the Central government, reported PTI, citing sources.

The bill seeks to allow the government to notify the period of maternity leave and gratuity that can be availed by employees under a Central law.

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At present, employees are paid Rs 10 lakh tax-free gratuity if they have provided five or more years of continuous service at the time of termination.

The bill was introduced in the Lok Sabha in the Winter session of Parliament last month by Labour Minister Santosh Kumar Gangwar. The bill seeks to amend the Payment of Gratuity Act, 1972, and is now expected to be passed in the Budget session, which is scheduled to begin by the end of this month.

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