Labour Minister Central Government has said the bill which seeks to double the tax-free gratuity ceiling to Rs 20 lakh is likely to be pushed for passage in the upcoming monsoon session of Parliament, beginning July 17. Minister has said that the bill to amend the Payment of Gratuity Act also seeks to enable the central government to change the ceiling for tax-free gratuity after factoring in rise in income levels by an executive order bypassing Parliament route to amend the law.
After the amendment in the Act, formal sector workers would be eligible for up to Rs 20 lakh tax-free gratuity. Earlier in February, the central trade unions had agreed on the proposal in a tripartite consultation with the labour ministry.
As per the Payment of Gratuity Act, an employee is required to do minimum service of five years to become eligible for gratuity amount. Moreover, the Act applies to those establishments where the number of employees is not less than 10.
However, 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.
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.
Further unions have demanded that rate of 15 days wages for each completed year of service be raised to 30 days wages.
However , the proposed amendment to the Payment of Gratuity Act as circulated by the government only deals with enhancing the ceiling of maximum amount under Section 4(3) of the Act from Rs 10 lakh to Rs 20 lakh.
The relevant amendment for central government employees was notified on July 25, 2016 and the enhanced amount ceiling was made effective from January 1, 2016.
The unions were of the view that the delay of eight months for employees covered under the Payment of Gratuity Act should not result in adversely affecting the interest of the concerned employees.
No comments:
Post a Comment