Gratuity Limit Raised


Gratuity Limit in india is raised from Rs. 3.5 lakhs to 10 lakhs for all employees whether it is private or public sector.  The necessary amendment in Payment of gratuity Act 1972 will be done in due course by passing a legislation in parliament.   It is only a formality.  The effect of this is that no income is payable up to limit of Rs.10 lakhs gratuity paid to employees.  So far , this limit was 3.5 lakhs and most of the companies pay gratuity more than 3.5 lakhs and retired employees getting more than 3.5 lakhs are compelled to pay income tax on the amount received as gratuity more than 3.5 lakhs.

C. R. Venkata Ramani

(AICWA)

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