Interim Finance Minister Piyush Goyal announced that the tax-free gratuity limit will be increased to Rs 30 lakh during his budget speech on Friday. Presenting the Union Budget for FY20, Goyal said that the gratuity limit will be hiked from Rs 20 lakh to 30 lakh.
The government had doubled the limit for tax-free gratuity to Rs 20 lakh in the private sector back in March last year. After implementation of the seventh Central Pay Commission, the ceiling of gratuity amount for central government employees was increased from Rs 10 lakh to Rs 20 lakh.
Employees who have completed at least five years in an organisation which has a workforce of 10 employees or more are liable for the benefits under the Payment of Gratuity Act, 1972.
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