Wednesday, 14 August 2019

Gratuity for employees raised to Rs 20 lakh; here is how you will benefitGratuity limit for govt employees to be increased to Rs 20 lakh latest press Note Gujarat Government

Gratuity for employees raised to Rs 20 lakh; here is how you will benefit  Gratuity limit for govt employees to be increased to Rs 20 lakh latest press Note Gujarat Government

The Centre has recently approved an amendment bill that seeks to increase the maximum limit of gratuity for private and public sector employees from Rs 10 Lakhs to Rs 20 Lakhs. This amendment once effective, will make employees in the private sector as well as public undertakings and autonomous organisations under the government who are not covered under the Central Civil Services (Pensions) rules, to be eligible to receive higher amount of gratuity.




This change would also bring parity with respect to the maximum limit of gratuity applicable for Central Government employees under the Central Civil Services (Pension) Rules, 1972. The Government had earlier increased the gratuity ceiling limit from Rs 10 lakhs to Rs 20 lakhs for Government employees with effect from 1 January, 2016. The Government has now initiated this amendment for employees in the private sector and public sector as well, considering the inflation and general increase in wages.

The Union cabinet has also approved 1% increase in the dearness allowance for Government employees and Dearness relief to pensioners with effect from 1 July 2017. The rate has been increased to 5% as against the current rate of 4% to compensate for the price rise and this is in accordance with the recommendations of the 7th Pay Commission.

The Payment of Gratuity Act, 1972 (“Gratuity Act”) which has been enacted to provide social security to employees after retirement is applicable to enterprises with ten or more employees. This enactment provides for payment of gratuity on account of retirement/superannuation/resignation/any physical impairment during the employment. Further, as per the rules, an employee is required to complete five years of continuous service (subject to certain exceptions) in order to be eligible for the payment of gratuity.

Eligible amount of gratuity which a non-government employee, who is covered under the Gratuity Act, is calculated at the rate of 15 days salary (based on last drawn salary), for each number of completed years of service. However, the maximum amount that can be paid shall not exceed Rs 10 lakhs which has now been proposed to enhance to Rs 20 Lakhs. Even though there is an upper limit, the law also provides that an employee has the right to receive a higher amount under any award or agreement or contract with the employer (better terms of employment).

Gratuity for employees raised to Rs 20 lakh; here is how you will benefit  Gratuity limit for govt employees to be increased to Rs 20 lakh latest press Note Gujarat Government

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Gratuity for employees raised to Rs 20 lakh; here is how you will benefitGratuity limit for govt employees to be increased to Rs 20 lakh latest press Note Gujarat Government Rating: 4.5 Diposkan Oleh: Raghu Thakor

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