Gratuity ceiling for private sector employees raised to Rs 20 lakh from Rs 10 lakh

New Delhi: The Central government has increased the gratuity payment limit from the existing Rs 10 lakh to Rs 20 lakh.

The recommendation to raise the gratuity limit was made by of the Seventh Pay Commission panel in its report.

It is reported that the decision to raise the gratuity limit was finalised in the meeting between the Labour Ministry and representatives from central trade unions on February 23.

The central trade unions are also seeking doing away of the requirement of at least 10 employees in an establishment and minimum five years of service for payment of gratuity.

On the other hand, the central government employees are also waiting for the final report on allowances. The Committee of Allowances under the Finance Secretary Ashok Lavasa, after reviewing the allowances recommended by the 7th Pay Panel, is reported to have submitted its report to the government on February 22.

The Allowances Committee was set up in July 2016 on the direction of the Cabinet to look into the provision of allowances other than dearness allowance under the 7th Pay Commission recommendations. Initially the committee was given a four-month time frame to come out with recommendations, which was later extended till February 22, 2017.

As per media reports, the Allowances Committee has revised the House Rent Allowance or HRA to 30%, up from 24% as suggested by the 7th pay panel.

The 7th Central Pay Commission (CPC) had recommended HRA at the rates initially from 24%, 16%, and 8 % and whenever DA reaches 50% it will be increased to 27%, 18% and 9%, The panel also said that s and when the DA reaches 100% theHRA will be revised to 30% , 20% and 10% for X,Y and Z cities respectively .

The pay commission also recommended doing away with 53 of the 196 allowances and merging a few others.

It is also reported that the committee has proposed to aoblish 52 allowances, and subsume 36 allowances into existing allowances or proposed as new one. 12 Allowances are reported to have been proposed to be retained without changes, while the rest of the allowances have been tweaked little.