For Central PSU executives the following was the order :
"In pursuance of the Presidential Directives issued by Ministry of Commerce & Industry, Govt. of India, vide order No. 11/9/2009-FT(M&O) dated 27th April, 2009, "
whereby ,
9. Gratuity & Leave Encashment :
9.1 Subject to other terms and conditions in vogue from time to time, ceiling on payment of gratuity stands revised from Rs. 3.50 lakhs to Rs.10 lakhs for those executives who have retired on or after 01/01/2007 or who will retire in future.
9.2 For Executives including those who have retired and have availed gratuity/leave encashment on or after 1.1.2007 till the date of issuance of this office order will be eligible for payment of arrears on account of gratuity/leave encashment taking the revised salary into consideration.
9.3 Executives who have ceased to be in the services of the Company on or after 1st January 2007 due to superannuation, death, voluntary retirement and valid resignation will be eligible for arrears of pay & allowances, in terms of this office order on a pro rata basis, wherever due. In the event of death of the beneficiary, payment of arrears shall be subject to submission of a written request from the Nominee(s).
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In my openion, same gratuity norms are provided for Central Govt. Employees from for whom the order came into effect from 1.1.2006 where as the effective date is 1.1.2007 for PSU executives.
As someone mentioned above, even I feel there is no upper limit for gratuity for private sector but the Income Tax exemption is for Rs. 3.5 lakhs as of now but a proposal has been sent for increasing this exemption to 10 lakhs.