Gratuity Payout Capping
In the payout of gratuity, is there a capping for the maximum amount that can be paid by the employer? For example, my company has defined gratuity as follows: "Gratuity is calculated at the rate of 15/26th of every month's basic salary for every completed year of service or part thereof in excess of six months, subject to a maximum of Rs. 1,000,000." Please let me know whether the capping of Rs. 10 Lakhs is correct and whether we actually have any capping or not, as per the Gratuity Act.
Regards, Chandrashekhar.
From India, New Delhi
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In the payout of gratuity, is there a capping for the maximum amount that can be paid by the employer? For example, my company has defined gratuity as follows: "Gratuity is calculated at the rate of 15/26th of every month's basic salary for every completed year of service or part thereof in excess of six months, subject to a maximum of Rs. 1,000,000." Please let me know whether the capping of Rs. 10 Lakhs is correct and whether we actually have any capping or not, as per the Gratuity Act.
Regards, Chandrashekhar.
From India, New Delhi
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Tax-free limit for gratuity has been hiked to Rs 20 lakhs.
Cabinet approves introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament
A company can pay more than Rs 20 lakhs voluntarily, but it will be fully taxable in the hands of the employee.
From India, Pune
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3180Cabinet approves introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament
A company can pay more than Rs 20 lakhs voluntarily, but it will be fully taxable in the hands of the employee.
From India, Pune
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