Government to Provide Tax Free Gratuity of Rs 20 Lakh to Organised Sector Soon

Government is all set to launch Payment of Gratuity Amendment Bill 2017 in upcoming budget session of parliament. Once the bill gets pass in the parliament, the eligibility of tax free gratuity  for employees of organized sector workers will be Rs 20 lakh. The Payment of Gratuity (Amendment) Bill+ , 2017 will be passed in the Budget session of Parliament, expected to begin by the end of this month

At present formal sector workers with five or more years of service are eligible for Rs 10 lakh tax free gratuity after leaving job or at time of superannuation.

The law is applicable to employees, who have completed at least five years of continuous service in an establishment that has ten or more persons. The amendment will also allow the central government to notify the maternity leave period for "female employees as deemed to be in continuous service in place of existing twelve weeks". 

After implementation of the 7th Central Pay Commission, the ceiling of gratuity amount for central government employees has been increased from Rs 10 lakh to Rs 20 lakh.
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