In mid of March 2017 it was reported in some of newspapers that
Labour Minister Bandaru Dattatreya has said that the government is likely to soon amend the Gratuity Act to enhance the ceiling of gratuity to Rs. 20 lakh from Rs. 10 lakh. "After clearance from the Cabinet, it will come to Parliament. This time, we have proposed to increase the gratuity from Rs. 10 lakh to Rs. 20 lakh," the minister said.
Last month, the central trade unions had agreed on the proposal in a tripartite consultation with the Labour Ministry. The employers as well as state representatives had also agreed to the proposal of raising the amount of gratuity to Rs. 20 lakh in the tripartite meeting held last
But till date it is not clear whether the proposal has been approved by the cabinet or not.
and if approved by the cabinet in the month of March 2017 , whether it has been presented in Budget session of Parliament or not.
As far as I know the bill for amendment in Gratuity act has not yet been presented in Budget session of Parliament .
May be possible it may be presented in forthcoming session. But it is also possible that the government under the pressure of private sector lobby corners the bill on some plea or the other.
Because the more it is delayed , the more private sector businessmen as well as PSUs will save money in payment of arrears to staff already retired on or after 01.01.2016.
or Government may tactfully put the bill in abeyance till the parliamentary election of the year 2019 so that it help the ruling party in garnering support from working class.
It is therefore need of the hour that leaders of all trade unions make strong appeal to Central Government to ensure that higher amount of Gratuity ceiling (Rs.20.00 lac) is uniformly applied to all labours of all classes and sectors private or government , as it is made effective for central government employees as per recommendation of 7th Pay commission.
It is important to point out here that due to casual attitude of trade union leaders and leaders of opposition parties the then UPA government had delayed payment of benefit of enhanced gratuity from January 2006 (for central government employees ) to April 2010 for Non-central government employees.
It is however a matter to noted that some of trade unions have at least incorporated this issue while submitting their demands on other issues related to bank staff .
I reproduce my letter dated 19th July 2016 sent to all important dignitaries on the issue related to enhancement of ceiling for payment of gratuity to Central Government staff through 7th Pay Commission w.e.f. 01.01.2016. This letter was submitted to PMO site also.
Through this letter I would like to draw the attention of our Prime Minister Mr Narendra Modi on proposed amendment in gratuity act 1972 for employees of central government.
Labour Minister Bandaru Dattatreya has said that the government is likely to soon amend the Gratuity Act to enhance the ceiling of gratuity to Rs. 20 lakh from Rs. 10 lakh. "After clearance from the Cabinet, it will come to Parliament. This time, we have proposed to increase the gratuity from Rs. 10 lakh to Rs. 20 lakh," the minister said.
Last month, the central trade unions had agreed on the proposal in a tripartite consultation with the Labour Ministry. The employers as well as state representatives had also agreed to the proposal of raising the amount of gratuity to Rs. 20 lakh in the tripartite meeting held last
But till date it is not clear whether the proposal has been approved by the cabinet or not.
and if approved by the cabinet in the month of March 2017 , whether it has been presented in Budget session of Parliament or not.
As far as I know the bill for amendment in Gratuity act has not yet been presented in Budget session of Parliament .
May be possible it may be presented in forthcoming session. But it is also possible that the government under the pressure of private sector lobby corners the bill on some plea or the other.
Because the more it is delayed , the more private sector businessmen as well as PSUs will save money in payment of arrears to staff already retired on or after 01.01.2016.
or Government may tactfully put the bill in abeyance till the parliamentary election of the year 2019 so that it help the ruling party in garnering support from working class.
It is therefore need of the hour that leaders of all trade unions make strong appeal to Central Government to ensure that higher amount of Gratuity ceiling (Rs.20.00 lac) is uniformly applied to all labours of all classes and sectors private or government , as it is made effective for central government employees as per recommendation of 7th Pay commission.
It is important to point out here that due to casual attitude of trade union leaders and leaders of opposition parties the then UPA government had delayed payment of benefit of enhanced gratuity from January 2006 (for central government employees ) to April 2010 for Non-central government employees.
Through this letter I would like to draw the attention of our Prime Minister Mr Narendra Modi on proposed amendment in gratuity act 1972 for employees of central government.
7th pay commission has recommended enhancement in ceiling for gratuity payment from Rs10 lac to Rs20 lakh for central government employees w.e.f. 01.01.2016. Central government Cabinet has passed it in the month of June 2016 and notification of the same is in process.
I request you to ensure that all employees of all companies, banks, insurance companies are given benefits under gratuity act with effect from the same date 01. 01.2016 from which Central Government employees are entitled. There should not be any discrimination with employees of other departments.
Last time ceiling was revised from 01.01.2006 for central government employees but staff of banks and other establishment got this benefit from May 2010. Due this employees who retired from services from January 2006 to April 2010 were not paid enhanced gratuity. This is totally injustice.
Please do not repeat the reign of injustice imposed on us during UPA government.
Here it is important to say that if government is not strict in compliance of its own guidelines, there is no doubt to me that many corporate houses, public banks and many companies will try to delay implementation of enhanced ceiling for gratuity payment to their employees on retirement to save expenses as much as possible.
I therefore make an appeal to Mr Narendra Modi , Prime Minister of India to announce the change in ceiling as soon as possible.
Delay in enhancement of ceiling for gratuity payment from Rs.10.00 lac to Rs.20.00 lac tantamount to discriminatory treatment with workers.
Good News On Payment Of Gratuity
Know About Gratuity Payment
Following are ten key point about Gratuity payment as published on NDTV site in March 2017
2) An employee gets gratuity when he/she resigns, retires or is laid off. In case of death or disablement there is no minimum eligibility period.
3) After the amendment in the Act, formal sector workers would be eligible for up to Rs. 20 lakh tax-free gratuity.
4) The unions had demanded the removal of conditions asking to have at least 10 employees in an establishment and minimum five years of service for payment of gratuity.
5) The proposed amendment is being brought to bring the maximum ceiling amount to Rs. 20 lakh in line with the 7th Central Pay Commission's recommendations as accepted by the government. The relevant amendment for central government employees was notified on July 25, 2016 and the enhanced ceiling amount was made effective from January 1, 2016.
6) The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26. According to this formula, the time period of over six months or more is considered as one year. This means if you have completed five years and seven months of service, the number of years would be considered as six years for calculation of gratuity benefit. On the other hand, if the service period is five years and five months, for gratuity calculation it will be considered five years.
7) An employer can however give higher gratuity than the amount under the prescribed formula.
8) Trade unions had demanded that the amended provision regarding maximum amount should be made effective from January 1, 2016, as done in the case of central government employees. Besides that, the rate of 15 days wages for each completed year of service be raised to 30 days wages, the unions had said during the tripartite meeting.
9) For government employees, entire amount of gratuity received on retirement or death is currently exempted from income tax.
10) In case of others, current income tax rules on gratuity depend on whether employees are covered under the Payment of Gratuity Act, 1972 or not. For non-government employees covered under the Gratuity Act, the income tax exemption on any gratuity received is least of the following:
- Maximum amount specified by the government which is currently Rs. 10 lakh
- Last drawn salary X 15/26 X years of service
- Actual gratuity received
For non-government employees not covered under the Payment of Gratuity Act, the income tax exemption on any gratuity received is least of the following:
- Half month's average salary for each completed year of service
- Maximum amount specified by the government which is currently Rs. 10 lakh
- Actual gratuity received
(Average monthly salary is to be computed on the basis of average of salary for 10 months immediately preceding the month, not the day, of retirement)
These tax laws will change once the Gratuity Act is amended.
Good News On Payment Of Gratuity
Know About Gratuity Payment
Following are ten key point about Gratuity payment as published on NDTV site in March 2017
1) Gratuity is a benefit received by an employee for services rendered to an organisation. For companies covered under the Gratuity Act, this benefit is paid when an employee completes five or more years of service with the employer.
2) An employee gets gratuity when he/she resigns, retires or is laid off. In case of death or disablement there is no minimum eligibility period.
3) After the amendment in the Act, formal sector workers would be eligible for up to Rs. 20 lakh tax-free gratuity.
4) The unions had demanded the removal of conditions asking to have at least 10 employees in an establishment and minimum five years of service for payment of gratuity.
5) The proposed amendment is being brought to bring the maximum ceiling amount to Rs. 20 lakh in line with the 7th Central Pay Commission's recommendations as accepted by the government. The relevant amendment for central government employees was notified on July 25, 2016 and the enhanced ceiling amount was made effective from January 1, 2016.
6) The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26. According to this formula, the time period of over six months or more is considered as one year. This means if you have completed five years and seven months of service, the number of years would be considered as six years for calculation of gratuity benefit. On the other hand, if the service period is five years and five months, for gratuity calculation it will be considered five years.
7) An employer can however give higher gratuity than the amount under the prescribed formula.
8) Trade unions had demanded that the amended provision regarding maximum amount should be made effective from January 1, 2016, as done in the case of central government employees. Besides that, the rate of 15 days wages for each completed year of service be raised to 30 days wages, the unions had said during the tripartite meeting.
9) For government employees, entire amount of gratuity received on retirement or death is currently exempted from income tax.
10) In case of others, current income tax rules on gratuity depend on whether employees are covered under the Payment of Gratuity Act, 1972 or not. For non-government employees covered under the Gratuity Act, the income tax exemption on any gratuity received is least of the following:
- Maximum amount specified by the government which is currently Rs. 10 lakh
- Last drawn salary X 15/26 X years of service
- Actual gratuity received
For non-government employees not covered under the Payment of Gratuity Act, the income tax exemption on any gratuity received is least of the following:
- Half month's average salary for each completed year of service
- Maximum amount specified by the government which is currently Rs. 10 lakh
- Actual gratuity received
(Average monthly salary is to be computed on the basis of average of salary for 10 months immediately preceding the month, not the day, of retirement)
These tax laws will change once the Gratuity Act is amended.
I submit below expression made by Mr. Rewati Raman Mishra on facebook today on 10th Fab 2017.
ENHANCMENT IN GRATUITY CEILING : No DEVELOPMENTS has taken place TILL DATE
FOR CENTRAL GOVT WORKERS GRATUITY CEILING IS RAISED TO Rs. 20 LACS UNDER 7th PAY COMMISSION WEF 01012016.
FOR RBI STAFF AS PER LETTER ADMINISTRATION CIR.02 DT. 03.11.2016 GRATUITY LIMIT FOR RBI STAFF IS ENHANCED FROM RS. 9.00 LACS TO RS. 18.00 LACS WEF 01012016 CALCULATION IS ONE MONTH PAY PLUS DEARNESS ALLOWANCE FOR EVERY COMPLETED YEAR OF SERVICE.
HOWEVER FOR BANKERS/INSURANCE STAFF/ PUBLIC SECTOR UNDERTAKINGS STAFF/ PRIVATE SECTOR STAFF THE GRATUITY LIMIT IS Rs. 10 LACS TILL DATE:
INITIATIVES MADE BY VARIOUS BANK UNIONS IN THE MATTER OF ENHANCEMENT IN GRATUITY CEILING:-:
01.ALL INDIA STATE BANK OFFICERS FEDERATION , VIDE ITS LETTER DT 19.07.2016 HAS TAKEN UP THE MATTER WITH CENTAL LABOUR MINISTER FOR ENHANCEMENT IN GRATUITY LIMIT AT PAR WITH CENTRAL GOVT STAFF.
02.ALL INDIA BANK OFFICERS CONFEDERATION, VIDE ITS LETTER DT 17.09.2016 WRITTEN TO SH ARUN JAITLEY,FINANCE MINISTER OF INDIA FOR AMENDMENT IN CENTRAL GRATUITY ACT IN THE FORTHCOMING SESSION OF PARLIAMENT.
03. AGAIN ALL INDIA STATE BANK OFFICERS’ FEDERATION HAS VIDE ITS LETTER 142 DT 06112016 TAKEN UP THE MATTER OF ENHANCEMENT OF GRATUITY CEILING FOR BANKERS TO RS. 20 LACS AGAINST THE EXISTING LIMIT OF RS. 10 LACS. WITH HON’BLE PRIME MINISTER OF INDIA
04. AIPNBOA HAS ON 19092016 WRITTEN TO FINANCE MINISTER, ARUN JAITLY TO ENHANCE GRATUITY LIMIT FOR BANK EMPLOYEES FROM 10 LAC TO 20 LAC.
05. ALL INDIA STATE BANK OFFICERS’ FEDERATION VIDE ITS LETTER No.6547/103/16 DATED: 29.12.2016 HAS MADE AN APEAL TO SHRI.NARENDRA MODI, PRIME MINISTER OF INDIA, FOR EXTENSION OF ENHANCED GRATUITY CEILING TO OFFICERS IN STATE BANK OF INDIA & ALSO WRITTEN TO SMT. ARUNDATHI BHATTACHARYA,CHAIRMAN STATE BANK OF INDIA TO PERSUADE THE GOVT AND GET THE GRATUITY LIMIT ENHANCED.
06. NOW UFBU HAS CALLED A STRIKE ON 28TH FABRUARY 2017 ON VARIOUS ISSUES AND ENHANCEMENT OF GRATUITY CEILING TO Rs. 20 LACS AT PAR WITH CENTRAL GOVT WORKERS IS ONE OF THE ISSUES .
IT IS MY HUMBLE SUBMISSION TO EVERY MEMBER OF BANK UNION WHO ARE PARTICIPATING IN THE STRIKE TO REQUEST THEIR LEADERS THAT THE ENHANCEMENT IN GRATUITY CEILING SHOULD Necessarily be made effective FROM 01012016 OTHERWISE THOUSANDS OF WORKERS WHO HAVE RETIRED/EXPIRED AFTER 01.01.2016 WILL BE GETTING LESS GRATUITY BY ABOUT Rs.5 TO 10 LACS EACH.
I WISH TO MENTION HERE THAT IN YEAR 2010 WHEN GRATUITY CEILING WAS RAISED FROM RS. 3.5 LACS TO RS.10 LACS THOUSANDS OF BANKERS/INSURANCE STAFF/ PSU WORKERS /PVT SECTOR WORKERS DID NOT GET THE BENEFIT DUE TO DELAYED IMPLEMENTATION OF ENHANCED GRATUITY
PLEASE PASS ON THE MESSAGE TO MAXIMUM PEOPLE WHETHER WORKING IN BANKS/ INSURANCE /PSUs/PVT SECTORS FOR BENEFIT OF ONE AND ALL.
Find Q3 2017 Result of SBI and its associate banks in Latest Bank Updates
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WEF 01.01.2016 DIFFERENCE OF EXTENDED GRATUITY,GOD KNOWS...
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