Gratuity limit hike to Rs 10 lakh gets Parl nod

Parliament on Wednesday approved enhancing the gratuity limit for employees from Rs 3.5 lakh to Rs 10 lakh as also the exemption threshold from income tax on it.

Last Updated: May 05, 2010, 20:48 PM IST

New Delhi: Parliament on Wednesday approved enhancing
the gratuity limit for employees from Rs 3.5 lakh to Rs 10
lakh as also the exemption threshold from income tax on it.

While the Lok Sabha had passed the Payment of Gratuity
(Amendment) Bill 2010 on Monday, the Rajya Sabha put its stamp
of approval on it today.
Labour Minister Mallikarjun Kharge, replying to a brief
debate on the bill said the legislative measure also provides
that the income tax exemption limit has commensurately been
increased to Rs 10 lakh from Rs 3.5 lakh earlier.

On demands for giving a retrospective effect to the
measure, Kharge said, "We want to give a lot, but there should
be a capacity (of the employer) to pay and it should reach the
beneficiaries."

He gave the same reason for not accepting demands from the
members to improve the formula for calculation of gratuity.

The bill was brought following demands from trade unions
and others to remove the ceiling or increase the maximum
payable amount, which was fixed in 1997.
Earlier participating in the debate, Congress member and
veteran trade unionist G Sanjeeva Reddy said payment of
gratuity should be done with retrospective effect.

CPI(M) member T K Rangarajan said seasonal workers are not
getting benefit and therefore their interests should also be
protected.

PTI