Tax free grants can be limited to Rs 20 lakh, Cabinet gives approval to the proposat

Tax free grants can be limited to Rs 20 lakh, Cabinet gives approval to the proposat said, "The central trade unions have been urging the government that the ceiling in the amount of gratuity should be removed." At present, as per the Payment of Gratuity Act, an employee is required to do minimum service of five years to become eligible for gratuity amount. Moreover, the Act applies to those establishments where the number of employees is not less than 10.The statement said the application of amended provision regarding maximum amount should be made effective from January 1, 2016 as done in the case of central government employees.Besides that rate of 15 days wages for each completed year of service be raised to 30 days wages, the unions demanded. The proposed amendment to the Payment of Gratuity Act as circulated by the government along with the letter dated February 15, 2017 only deals with enhancing the ceiling of maximum amount under Section 4(3) of the Act from Rs 10 lakh to Rs 20 lakh, the unions said. 

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