The Payment of Gratuity (Amendment) Bill, 2017, was passed in the Rajya Sabha today making way for the government to double the limit of tax-free gratuity. The bill was already passed in the Lok Sabha on March 15. The passing of the bill also means that the government will now be able to raise the ceiling of gratuity from time to time without amending the law.
The tax free gratuity for the employees of the public and private sector was previously Rs 10 lakh, which will now be doubled by the government to Rs 20 lakh. The move will benefit millions of employees of both the sectors, who will now have to pay no tax on gratuity received up to Rs 20 lakh.
Apart from the ceiling on gratuity, the amendment bill will also allow the government to decide the period of maternity leave for female employees.