Higher tax-free gratuity to benefit senior employees more

Cap of Rs 10 lakh set to be raised to Rs 20 lakh, private employees to be on par with govt, PSU

Salaried employees in the private sector may soon be able to enjoy up to Rs 20 lakh tax-free gratuity. The Labour Ministry has proposed an amendment to Payment of Gratuity Act following a meeting with the central trade unions. The amendment is likely to be passed by the government by April. This proposal will bring private sector employees on par with government and public sector undertakings'. Increasing the tax-free gratuity to Rs 20 lakh was one of the recommendations of the 7th Pay Commission, which been approved.

Gratuity is one of the mandatory benefits enjoyed by salaried employees, the other one