Amendments In Payment Of Gratuity Act: Proposed

Sunday, February 26th, 2017 Amritesh 25 responses

Proposed Amendments in Payment of Gratuity Act (Eligibility)

Gratuity Payment Act is expected to be amended soon. In the recently concluded tripartite meeting it has been decided that the Tax Free Gratuity limit to be enhanced to Rs 20 lakhs from Rs 10 lakhs to bring it at par with the Government employees who enjoy similar benefits as per the recommendations of the 7th Pay Commission. Official Notification on the same is expected soon. Few more amendments in Payment of Gratuity Act has been proposed.

The recommendation to increase the Tax Free Gratuity to Rs 20 lakhs has been agreed upon by the Labour Ministry and the Central Unions. The move will benefit Individuals employed in the private sectors. Along with it, host of other reforms were also suggested to the Ministry of Labour by the Central Unions which are discussed below. It has also been proposed to make the amendment applicable from 1st January, 2016 in line with the norms set for Government employees.

Gratuity Act,1972

Benefits Calculation Under Gratuity Act

Demands raised/proposed by the Labour Unions to the Labour Ministry:

Proposed Amendments in Payment of Gratuity Act (Calculation)

The Labour Unions have called for changes in the wage rates for calculation of Gratuity. It has been recommended to replace the 15 days wage period with 30 days for the calculation of Gratuity. The recommendation, if implemented will double your Gratuity Benefits.

Proposed Amendments in Payment of Gratuity Act (Applicability)

Labour Unions have also suggested for the removal of minimum of 10 employees clause for applicability of the Act in Establishments. Thus more Individuals could be covered under the Act and will be eligible receive the Benefits prescribed as per the Act.

Proposed Amendments in Payment of Gratuity Act (Eligibility)

Recommendations have also been made to do away with 5 years service clause to be eligible for the Gratuity. This would benefit employees who are looking to switch jobs after serving for short tenure. Proposal also has been made to bring down the service period to 3 years and include provision to transfer gratuity benefits when an employee switches jobs.

The above recommendations are aimed at bringing the employees in Formal Sector at par with Government employees along with improvement in the present Benefit structure for the employees.

badge
mm
Amritesh is an experienced professional in the field of HR, Finance and Compliance. He is currently working in the IT Industry with an US based firm. He took up Blogging as a hobby which eventually turned into passion. He primarily focuses on topics related to Personal Finance, HR, Compliance and Technology.

All the opinions/suggestions/views expressed on this blog are just for sharing information. Readers are requested to consult their respective financial advisers and experts before taking any decision. Views shared through post or comments are personal opinion meant for reference of the readers. These should not be considered as Investment Advice or Legal Opinion. The Blog or the Author does not take any responsibility regarding any such action taken by any Individual.
Amritesh on FacebookAmritesh on GoogleAmritesh on InstagramAmritesh on LinkedinAmritesh on PinterestAmritesh on TwitterAmritesh on Youtube

Leave a Reply

Your email address will not be published. Required fields are marked *

Leave a Reply

25 Comments on "Amendments In Payment Of Gratuity Act: Proposed"

avatar
  Subscribe  
newest oldest most voted
Notify of
BHASKAR
Guest

Kindly share the notification please

Kishore d
Guest

Thanks , but from when this act is applicabe or expected to be applicable

Rajeshwar Joshi
Guest

Sir I am banker working in SBI as SR. Manager . Previous known as SBP . I have 44 months service. Due VRS option I am little bit confused on pension issue and gratuity issue? As I want to know ceiling of gratuity as on date. to decide for. VRS. Pension at SBP is 50% and in SBI it’s 40% . So gratuity implementation date will help to decide me for VRS. Pls advise in matter if possible.

Thirumala Rao Chakiri
Guest
Thirumala Rao Chakiri

Can the employees of banks will be eligible Rs 20.00 lack gratuity.

T V RAMANA RAO
Guest

thank you for the analysis sri amritesh.

Arun Kumar Bajpai
Guest

Useful information.

Arun Kumar Bajpai
Guest

would you please tell me what amount of pension i will receive after supreme court ruling for epfo pension

Arun Kumar Bajpai
Guest

at present i am getting pension of Rs. 2589/- p.m.

R.N Wakhloo
Guest

Please let me know when this amendment will be brought out and made applicable.

ashok s mam
Guest

WHY IS THIS AMENDMENT GETTING DELAYED INCREASE OF LIMIT TO 20 LAC IN GRATUITY

Trushanti
Guest

Hi,
Can you tell me till when this amendment will come?
I am leaving this organization in next month and I am not getting gratuity because there are 10 days less to complete 5 years.

manjunath Ratnakar
Guest

when it is going to be implemented for bankers and with what date. Advise present status

Gautam Chatterjee
Guest

Changes in Rates of Gratuity Calculation

The Labour Unions have called for changes in the wage rates for calculation of Gratuity. It has been recommended to replace the 15 days wage period with 30 days for the calculation of Gratuity. The recommendation, if implemented will double your Gratuity Benefits.————- What is the status of the above demand. Is it approved? or Not yet.

trackback

[…] Amendments In Payment Of Gratuity Act: Proposed […]