Understanding the Latest Gratuity Act Amendments: How Will They Affect You?

Please find enclosed the attached file for the new amendments for Gratuity made by the Government for your information. I hope it will be helpful to all.

Hi Bhagat,

What are the limitations of Gratuity? Can you please elaborate for me?

Dear Sunil,

The ceiling of gratuity amount is now Rs. 20 Lakhs. Ministry of Labour & Employment 04-April, 2018 15:12 IST Enhancement of Gratuity Limit The Government has issued Notification the same day wherein gratuity limit has been increased from Rs. 10 lakhs to Rs. 20 lakhs under the Payment of Gratuity Act, 1972.

Suresh

Sir,

If an employee retired before 29th March 2018, is he eligible for the enhanced gratuity of Rs. Twenty Lakhs?

Dear Vinod,

Why do you worry so much about the date? To receive a gratuity amount of Rs. 20 lakhs, one must have a Rs. 1 lakh basic salary and 35 years of continuous service. Previously, gratuity amounts up to Rs. 10 lakhs were exempted under the Income Tax Act, but now this limit has been increased to Rs. 20 lakhs. Additionally, the ceiling has also been raised to Rs. 20 lakhs.

Furthermore, there is no law preventing you from paying gratuity above the ceiling amount; however, the recipient is responsible for paying income tax on any amount exceeding the ceiling.

Suresh

Bhagat R K Sr. Executive - HR & Admin.

Dear Mr. Bhagat,

Ours is a private company. I would like to get some information pertaining to our staff who passed away 10 days ago due to a health problem (Brain hemorrhage). Kindly inform me about the benefits available to his family members. As per my understanding, the following benefits apply. Please confirm if they are correct:
1. Funeral expenses
2. PF
3. Gratuity
4. EDLI
5. Pension
6. Insurance

Thank you.