Payment of Gratuity Amendment Bill

The Central Government of India introduced the Payment of Amendment (Gratuity) Bill in a move to make benefits to Government and organised sector workers uniform. The bill was proposed and met with unanimous support before it was passed. While the notification is official, circulation of the official gazetted copy is awaited.

Salient Features:

Through this amendment, there are two main highlights that come to the fore:

-          Increase of tax free limit from ten lakhs to 20 lakhs

-          Consideration of maternity leave period as continuous service

Eligibility:

The Payment of Gratuity Act applies to:

-          Workers in establishments with 10 or more persons

-          Workers in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments

-          Workers having completed at least five years of continuous service

Implications

Workers fulfilling the eligibility criteria will now be allowed tax free gratuity of upto 20 lakhs at the time of leaving, or at the time of superannuation. Women on maternity leave will be considered to be in continuous service for the purpose of gratuity. This move is bound to benefit lakhs of people, as measures to give better opportunities, improved working conditions and uniform benefits to all continue to be put in place.