The union government approved gratuity limit 20 lakhs notification. The government initiated this process to make an amendment of payment of gratuity act 1972 to benefit the large employee base. The payment of the gratuity amendment bill 2017 will increase the maximum limit of the gratuity of employees, in the private sector and public sector undertakings / autonomous organizations under the government who have not covered under Central Civil Service (CCS) pension rules, at par with central government employees.
The main aim of the gratuity act 1972 is to provide social security to the employees after their retirement and this recent amendment will bring more benefits to the employees. Along with employee provident fund act 1952, the payment of gratuity act 1972 is one of the best retirement benefits scheme for employees after their retirement.
Important Points In Gratuity Limit 20 Lakhs Notification
Till now the nontaxability gratuity limit for private sector employees is 10 lakh rupees, but as per this latest gratuity limit 20 lakhs notification, the gratuity limit for private sector employees is increased to 20 lakhs. In case of government sector employees, this limit is fixed to 20 lakhs.
This act is applicable to all the establishments which have employed 10 or more than 10 employees.
The minimum service period to get gratuity amount is 5 years of service, in some cases like permanent disablement or death of the member, the employee or nominee will get gratuity amount even less than 5 years also.
The basic formula to calculate the gratuity amount is (basic salay/26) X 15 X No.Of. Years Of Service.
The latest changes made as per gratuity amendment bill 2017 will be effective from 1 January 2016.
But when comes to reality this amendment will be more beneficial to the high salaried employees only, Do share your opinions and doubts on gratuity limit 20 lakhs notification.