Increase in Gratuity Limit Exemption

CA.Sanjiv Singh (P) (37 Points)

19 May 2010  

Dear All,


The Parliament has passed the Payment of Gratuity (Amendment) Bill 2010 on 3 May in the Lok Sabha. The Bill seeks to amend the Gratuity Act 1972 to increase the maximum gratuity payable to an employee to ten lakhs rupees (INR 1,000,000) from the existing three lakh fifty thousand (INR 350,000).

The Bill will now move to the Rajya Sabha to become an Act. This will be followed by a notification in Official Gazette. Currently the Bill states the effective date will be chosen by the Central Government and will be stated in the Official Gazette notification.


Further, The Rajya Sabha has also passed the Bill.  The expectation is that a notification should be published in due course.  We await further details as to the effective date of implementation to be specified in the notification.