Change to gratuity Act likely in coming session

Act applies to those establishments where the number of employees is not less than 10

The government is likely to bring a change to an Act to make gratuity up to Rs 20 lakh tax-free in the upcoming second half of the Budget session of Parliament slated to begin on Thursday.

The change to the Payment of Gratuity Act will not only raise the tax-free portion of the gratuity but also allow the government to increase it through the executive order in the future, official sources said. 

Ceiling on gratuity will be linked to inflation and that way it would be raised through an executive order in the future, if the Bill is passed by Parliament. 

Earlier, the