In a significant move, the upper house of the Parliament passed Payment of Gratuity (Amendment) Bill, 2017.
With the passage of this bill, the government is now in a position to enhance the ceiling of tax-free gratuity to Rs. 20 lakh from the existing Rs. 10 lakh for employees under the Payment of Gratuity Act.
The move will also allow government to fix the period of maternity leave for female employees.
It need be mentioned that after the implementation of the 7th Pay Commission, the ceiling of gratuity amount for central government employees was doubled to Rs. 20 lakh.
Sources confirmed that the amendment to the payment of gratuity law comes in the backdrop of Maternity Benefit (Amendment) Act, 2017 enhancing the maximum maternity leave period to 26 weeks.
The amendment will provide social security to workers after retirement.>