Gratuity Act Confusion: Does the 2010 Amendment Affect Retirees Before May 2010?

Could you kindly clarify whether the gratuity of Rs. 10 lakhs ceiling to be paid to a person retiring after 2006 has been overruled by this amendment of the Gratuity Act 2010 and is only applicable for persons retiring in May 2010 and thereafter? Nothing has been clarified regarding this in the amendment.

Regards,
Ranjit Dutta

Dear Ranjit, Please find attached both notifications to clarify the situation. In my opinion, you are mixing up the matter of gratuity payment to be made to government employees governed by Civil Service Rules with that of employees entitled to gratuity payment under the Payment of Gratuity Act, 1972.

Regards,
R.N. Khola

Perhaps I was not clear enough with my query. I refer to the Sixth Pay Commission where we were entitled to Rs. 10 Lakhs as Gratuity but were not paid the amount as the clearance was not received from DPE. For information, the Cabinet had cleared the entire Sixth Pay Commission recommendation except for certain allowances, including the Gratuity portion. However, with the amendment to the Gratuity Act where the ceiling was raised to 10 lakhs w.e.f. 24th May 2010, we find that we are not being paid the enhanced Gratuity for persons who retired in the period before the amendment.

As per my understanding, the amendment means that the amount of Rs. 10 lakhs enhancement indicates that the same is non-taxable only with effect from that date and not that the payment is to commence from 24th May. May you please clarify.