The Parliament on Thrsday passed a crucial bill which will empower the government to fix the amount of tax-free gratuity and the period of maternity leave with an executive order. mployees can draw gratuity of up to Rs. 20 lakh tax-free, the government said after a proposed law empowering it to fix the amount was passed in parliament with cross-party support. The move, which doubles the tax-free cap from the existing Rs. 10 lakh, will benefit millions of employees in the public and private sector companies. The Payment of Gratuity Act will allow the government to raise the limit and also fix the period of maternity leave.
The bill moved by Labour Minister Santosh Kumar Gangwar was passed by a voice vote. The Lok Sabha had given its approval to the important bill last week. The gratuity law will now be benificcial to people working in the private and unorganized sector.
After the implementation of the 7th Pay Commission, the ceiling of gratuity amount for central government employees was doubled to Rs 20 lakh. 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.