(Legislative Department)

New Delhi, the 29th March, 2018

The following Act of Parliament received the assent of the President on the 28th March, 2018, and is hereby published for general information:—


NO. 12 OF 2018

[28th March, 2018.]

An Act further to amend the Payment of Gratuity Act, 1972.

BE it enacted by Parliament in the Sixty-ninth Year of the Republic of India as follows:—

1. Short title and commencement.

(1) This Act may be called the Payment of Gratuity (Amendment) Act, 2018.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

2. Amendment of section 2.

In the Payment of Gratuity Act, 1972 (hereinafter referred to as the principal Act), in section 2, for clause (k), the following clause shall be substituted, namely:—

(k) “notification” means a notification published in the Official Gazette and the expression “notified” shall be construed accordingly;’.

3. Amendment of section 2A.

In section 2A of the principal Act, in sub-section (2), in the Explanation, in clause (iv), for the words “twelve weeks”, the words “such period as may be notified by the Central Government from time to time” shall be substituted.

4. Amendment of section 4.

In section 4 of the principal Act, in sub-section (3), for the words “ten lakh rupees”, the words “such amount as may be notified by the Central Government from time to time” shall be substituted.


Secretary to the Govt. of India.

List of Recent Gratuity Related Notification

Title Notification No. Date
Payment of Gratuity (Amendment) Act, 2018 applicable from 29.03.2018 Notification No. S.O. 1419(E). 29/03/2018
Govt. increases maximum gratuity limit to Rs. 20 Lakhs Notification No. S.O. 1420 (E). 29/03/2018
Govt notifies maximum maternity leave of 26 weeks for Gratuity Notification No. S.O. 1421 (E) 29/03/2018
President assents Payment of Gratuity (Amendment) Act, 2018 NO. 12 OF 2018 29/03/2018

More Under Corporate Law


  1. Hardesh Kumar Jain says:

    Dear Sir, I am a retired officer from an autonomous body under the Ministry of Corporate Affairs. My question is from which date the revised Gratuity is applicable i.e 01-01-2016 when the 7th pay commission was made applicable or from 29th February, 2018 when it was given approval by the President of India. As you are aware that the notifications are always issued at a later date and the pay commissions are made applicable with retrospective effect. So kindly clarify in the matter of gratuity. Regards

  2. Rajesh Kumar Gupta says:

    I vh worked in a public Ltd company 4yr and 7 month & 25 day then what am i eligible for gratuity. or not..

    Rajesh gupta

  3. Santosh Naik says:

    Whether benefti of raising the threshold limit of rs. 20,00,000/- applicable to a central public sector undertaing employee who took VRS in the year 2015 but due to retire in July 2018?

  4. rahul says:

    it should be 01.01.16 as applicable to central govt. employees, why govt is discriminating psu and bank employees from center. psu and bank employees are also govt. employees, they should also get enhanced gratuity at par with other employees. what is their fault if they retired or died during 16–17 and govt could not pass the bill in parliament on time. ???

  5. Suresh chander says:

    Sir you see some PSU giving RS ,20 lac GRATUITY to their officers but after salary revision which due on 01/01/2017 .in same division employees salary revision is pending which due also above date and employees got RS 20 lac after 29/03/2018.why this two types of law running here.

  6. Ramanand Jha says:

    My Father was expired in Nov 2017 & he was suppose to retire from ONGC on 28.2.2018. My Mother received gratuity of Rs 10 lakh tax free + 10 lakh with 33% tax deduction. The gazette notification s.o. 1419(E) & 1420(E) passed on 29.03.2018. please do inform whether I can this tax refund.
    With due regards.

  7. ajit parwani says:

    I retired from ONGC on 31.12.2017. I received gratuity of Rs 10 lakh tax free + 10 lakh with 33% tax deduction. The gazette notification s.o. 1419(E) & 1420(E) passed on 29.03.2018. please do inform whether I can this tax refund.
    With due regards.
    Ajit Parwani

  8. Jcporwal says:

    Please advise i
    Retired in December 17. is tax benefits is applicable to me or not as govt notification comes​ inforce on 29.3.18

  9. Hari says:

    Finally is there clarity now on applicable date for Gratuity Amendment act 2018 for private employees? is it 1/1/2016 or 29/03/2018

  10. C. L. Saini says:

    1. My company had classified the wages & salaries of all muster roll employees as 70% basic + 20% HRA & 10% Conveyance allowance for the purpose of EPF & ESI schemes. The gratuity is payable on basic salaries and wages. In my own particular case, no classification had carried out because I am not covered under any scheme of EPF & ESI right from the begning of my services. My salary is Rs. 38500.00 p. m. and it shown under the head of Basic Salary only. Here my question is this that : Am I eligible for the payment of gratuity at the rate of Rs. 38500.00 and not at the 70% of total salary amount?

    2. During my service tenure, I am met with a major accident on the road and spent lacs of rupees from my own pocket because I was not covered under ESIC. For the time being, my employer, at a specific request, advanced me some money equal to amount of gratuity accrued (but not due) up to that time to meet the accidental expenditures. At the end of the financial year, amount paid as advance against gratuity accrued ,transferred to Gratuity Paid Account from my Advance Account in the Books of Accounts of the Company. At the time of accident, I did not left the job of the company except 3.5 month without pay leaves spent in hospital and bed rest. Now my employer says that he had paid gratuity once to me (as advance) and no further payment of gratuity is due on later services. I joined on 06.08.2001. Accident date is 04.06.2012. Without pay leaves were from 04.06.12 to 17.09.12. Also there is a service break of 10 month approx. ( 01.05.14 to 22.02.15). During this service break, I undergone two operation : One for heart stent and second for removal of an accidental Implant. I am still on job. Kindly guide me that I am eligible for the payment of gratuity on my entire service tenure? My employer can recover the amount of advance paid to me against gratuity accrued and written off against Gratuity Paid a/c as agreed at that time.

  11. A K DE says:

    We are working in port sector under Ministry of Shipping,Govt of India.All our pay revisiin dues are due from 1.1.2017.Central Govt employees have bn given revised gratuity from 1.1.2016 .Then what is the rationale in applying revised gratuity amount from 29.3.2018..Who should be responsible for not making it applicabke retrospectively and thus depriving several of their retirement dues.

  12. mk says:

    The irony is that it is effective from 29.3.2018 and not 1.1.2016 as the gazette notification does not speak on 1.1.2016

    They speak something and do the other thing

  13. GGovardhan Billa says:

    The Genesis for enhancing gratuity ceiling is 7 pay commission which is effective from 1.1.2016. Are the Central Government employees are paid enhanced gratuity from 29.03.2018 or 01.01.2016. Please clarify. Whether the present G.O issued for govt. employees or private employees ? Since already govt. depts are implementing it from 2016 onwards. is it justified that 29.03.2018 is effective date ?

  14. kk das says:

    When 20 lacs gratuity is already being paid from 1.1.16 then the effective date is self explanatory. Only 10 to 20 lacs was needed to be declared.

  15. Gulshan says:

    The govt decision to implement it from 29.3.18 instead of 1.1.18 is highly unjustified and in costitutional as some are allowed tax free rs 20.lacs since 1.1.16 some since 29.3.18. Are they not Indians who retired between 1.1.16 to 28.3.18. Is it democracy or clear cut demoncracy.

  16. Srinivas says:

    Why does the government always give a step motherly treatment to private employees? If I understand, the govt employees are eligible for 20 lakh limit from 1st Jan 2016. Then why should private employees not get the same. First of all, it would have avoided all these unnecessary complications if it had not restricted the benefit to govt employees while making the amendment way back in 2016 itself. Is this not changeable in court? Was it intended or someone goofed up while writing the notification in 2016, to specify it for govt employees only?

  17. Budibasappa says:

    As per govt note and approved by parliament effective date of gratuity payable is from 1/1/2016 were as Gazzetta notification effect date is 29/3/2018 please clarify which one is correct

  18. Kumar says:

    For public sector employees it was done retrospectively, but for private sector employees it seems to be effective only prospectively. Why this step motherly treatment?

  19. Rachana says:

    Dear Sir,

    please also let us know the gratuity for private employees where employees are less then 10 in a private organisation, but are serving the cpmpany for the past 20+ years


  20. R satyanarayana says:

    While proposing the bill, the ceiling of 20 lakh. Is applicable from 1.1.16. Where as in the amended act it is applicable from 29.3.18. Hence it further requires clarification from govt.

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