Union Labour Minister Bandaru Dattatreya on Tuesday said the Bill to double the ceiling for tax-free gratuity from Rs 10 lakh to Rs 20 lakh will be brought up in the Monsoon Session of Parliament that begins on July 17, PTI reported. The Union Cabinet has not yet approved the draft Bill seeking to amend the Payment of Gratuity Act.
“This is on our agenda... It will soon go to the Cabinet for approval,” the minister told PTI.
As per the draft Bill, formal sector workers will be eligible for up to Rs 20 lakh tax-free gratuity. The government is likely to push to pass the Bill in the upcoming Monsoon Session of Parliament, Dattatreya said. The hike in the gratuity of central government employees from Rs 10 lakh to Rs 20 lakh was notified in July 2016, as per the 7th Pay Commission’s recommendations.
Under the Gratuity Act, an employee who has completed five or more years of service with an employer is eligible for gratuity. In February, central trade unions had demanded that this condition be removed.
Among other demands, the unions had also sought to do away with the rule by which the Act applies only to establishments that have more than 10 employees. They further demanded that the amended provision be made effective from January 2016, as it was done in the case of central government employees, PTI reported.