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    Income tax exemption limit on gratuity doubled to Rs 20 lakh: Labour Min

    Synopsis

    The latest enhancement of tax exemption limit on gratuity follows a government notification issued on March 29, 2018.

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    This would benefit employees of (PSUs) and other employees not covered by the Payment of Gratuity Act, 1972.
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    NEW DELHI: The labour ministry said Thursday that the income tax exemption limit on gratuity has been doubled to Rs 20 lakh from the existing Rs 10 lakh, a move that will benefit employees who are not covered by the Payment of Gratuity Act, 1972.

    "Ministry of Finance has enhanced the income tax exemption for gratuity under Section 10 (10) (iii) of the Income Tax Act, 1961 to Rs 20 lakhs," a labour ministry statement said.

    Labour Minister Santosh Kumar Gangwar has said in the statement that this would benefit those employees of public sector undertakings (PSUs) and other employees not covered by the Payment of Gratuity Act, 1972, and has thanked Finance Minister Arun Jaitley for enhancing the exemption limit.

    The ceiling of gratuity amount under the Payment of Gratuity Act, 1972, has been raised from time to time keeping in view overall economic condition and employers' capacity to pay and the salary of employees, which have been increased in private sector and in PSUs.

    The latest enhancement of tax exemption limit on gratuity follows a government notification issued on March 29, 2018, under which the ceiling was increased from Rs 10 lakh to 20 lakh effective March 29, 2018.

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    9 Comments on this Story

    Manda Phadke500 days ago
    Only the Bank employees and PSU employees are excluded from Gratuity amount of 20 lacs from 01/01/2016. Always this ''Sautela'' treatment. Why? Don''t we work sincerely? We never extra under the table money like others. So why this disparity Jaitley Sir?
    Ramesh Shah516 days ago
    THE VERY MEANING OF GRATUITY IS YOUR GRATEFUL SERVICES CONSIDERATION. YOUR LOYALTY AND THE FAITHFULNESS. PSU STAFF GETS CORRUPTION BUT A NORMAL MAN GETS LIFE''S ACHIEVEMENT. HE HAS PAID THE TAXES AT SOURCE DURING THE WORKING LIFE SO ANY AMOUNT MUST BE TAX FREE. THE F M IS JOKING.
    Concerned Citizen516 days ago
    Since the notification is applicable from 29th March 2018, does that mean that it is applicable for FY 2017-18 because it was before the end of that FY? If yes, then does the limit of 20 lacs apply to a person retiring in Dec 2017??
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