JOIN USFormal sector workers will soon be eligible for a tax-free gratuity of Rs 20 lakh with Parliament set to pass the Payment of Gratuity (Amendment) Bill, 2017, in the upcoming Budget session.
At present, the formal sector workers with five or more years of service are eligible for Rs 10 lakh tax-free gratuity after leaving the job or at the time of superannuation.
"The Payment of Gratuity (Amendment) Bill, 2017, will be passed in the Budget Session of Parliament, expected to begin by the end of this month," a source said.
"The government wants to provide tax-free gratuity of Rs 20 lakh to organised sector workers at a par with those in the central government," the source added.
The bill seeks to allow the government to notify the period of maternity leave and gratuity that can be availed by employees under a central law.
The bill was introduced by Labour Minister Santosh Kumar Gangwar in the Lok Sabha on December 18.
The Payment of Gratuity Act, 1972, was enacted to provide gratuity payment to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments.
The law is applicable to employees who have completed at least five years of continuous service in an establishment that has 10 or more people.