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Cabinet approved amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh to Rs 10 lakh

The Cabinet on Thursday approved an amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh to Rs 10 lakh. The Bill to amend the Act will now go to Parliament, a government official told.

Every salaried person, who has completed five years of government or private sector service, is eligible for half a month’s salary as gratuity for every completed year of service. But the gratuity pay of those with higher salaries is now limited at Rs 3.5 lakh. The proposed amendment raises this to Rs 10 lakh. Every employer with more than ten salaried workers is mandated to provide gratuity to the eligible employees. Many companies, however, do not keep the gratuity liability adequately funded. That is, they make provisions for future payment, but do not set aside funds towards the future payment. Listed companies are expected to disclose their gratuity liability.

Download Payment of Gratuity Amendment Bill 2010

Related Post:-

1. Cabinet approved amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh to Rs 10 lakh

2. Lok Sabha passes bill to hike gratuity ceiling to Rs. 10 lakh from Rs. 3.50 Lakh

3. Gratuity Limit increased to 10 Lakh as per Income Tax Act and Gratuity Act in Rajya Sabha

4. Payment of Gratuity (Amendment) Act, 2009 – Amendment in section 2 and insertion of section 13A, Change in definition of employee

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146 Comments

  1. Bharat Singh says:

    I retired on 30.011.2007 and 6th pay commission applied in my corporation. I received all the retiral benefits of 6th pay commission excluding gratuity enhancement from 3.5 lakh to 10 lakh.
    It is applicable to me or not.

  2. Nimbaji Ingale says:

    The Gratuity limit has been increased from 3.5 lakhs to 10 lakhs to 20 lakhs.
    Whether this limit is for free ie no tax upto aforesaid limit and thereafter it is taxable. Upto 3.5lalhs. No tax& above 3.5 lakhs ( 5 lakhs — 3.5= 1.5 is taxable as per the slab applicable ) pl clarify.

  3. Om prakash singh says:

    I retired on 31/1/2009 from bank I was paid gratuity Rs 350000 pl clarify whether I should get it under limit of 10lacs whether amendment of GAct is effective from 1/1/2006or 24/5/2010 should I apply for difference payment thank you very much for your clarification om prakash singh

  4. C.Ravi says:

    I have taken VRS during April 2006 and i was paid only 2.5lakhs gratuity can u please confirm the Hon President approval whether 2006 or 2007

  5. ranganath says:

    At least now we hope. modi government will look into disparity made, and will revise the the effective date of enhancement of. Gratuity to 10 laks according to 6th paycommisson uniformly to all including cpsu ie from 2006,/2007

  6. Sastry says:

    May Day 2012 Labour Ministry pro labour advertisements are over. Only action is awaited. Is the labour ministry and labour Union representatives are hearing?

  7. A.K.SINHA says:

    i am of a strong belief that all the section of society and now joined by govt.are not interested in senior citizen.No one bothers to look into their care.Now needed more but atleast dont divide this group that too in the terms of years.i extend all support towards this amended act and can come to one conclution.let 1.1.2006 be one date for all segment A.K.SINHA ,CHAKAN ,PUNE

  8. kc klair says:

    There appears to be a sinister design on the part of this govt to effect gratuity date wef 24.05.2010 instead of 1.1.2006. Parliament has not indicated any date. It appears that the Govt has not only befooled the affected employees but also the parliament, reasons for which are only known to the labour minister. It will be in the fitness of things for the labour minister to confide this to the countrymen. It is not for nothing that the ruling party is getting a drubbing in elections everywhere. It is high time they see writings on the wall and make amends.

  9. AMIT CHHABRA says:

    HI SIR HOW R U I AM AMIT CHHABRA & MY DAD WAS IN PNB HIS BASIC PAY WAS 17980 & WE GOT DEATH GRATUITY 3.5 LAKHS ONLY PL GUIDE ME BCOZ WHEN I GO TO BANK THEY DONT GUIDE ANYTHING & SAY ABHI KUCH NAHI KAH SAKTE .PL HELP THAT CAN I GET THAT BALANCE AMOUNT .

  10. Satish Kumar Sinha says:

    Sir,
    I retired on 31 Oct 2009 from the Indian Air Force after serving 29 years as Junior Warrant Officer. I have been paid Rs 3.5 Lac as Gratuity. Am I eligible to get enhanced rate of Gratuity Rs 6.5 Lac? If anyone knows about this, they are free to reply me.

  11. zankar majithia says:

    i retired on dt.31-05-2007, i rcvd. 3.50.000 for gratuity, let me inform that new amendment is applicable for me pl inform. am i eligible for gratuity amt. upto rs. 10,00,000/-.

  12. PRADEEP KUMAR SHARMA says:

    I joined central govenment service(Postal deptt.) on 27.01.2005 and resigned on 18.02.2010 under new pension scheme, Now Is am eligible for gratuity under new pension scheme
    suggest me court case in this regards
    thanks

  13. Vinod Kumar says:

    Sir, Pl. tell me some questions 1. My job 27.05.2004 to 14.01.2010, Ministry of Coal, Shastri Bhawan, New Delhi. As a typist 5000/- PM (Contract basis). My question, I am eligible for Gratuity.

  14. Boby says:

    As per News papers our Hon. Politicians are demanding Ex-gratia of Rs.10 lakh for people who died in hooch tragedy. Employees who retired after 3 decades of service do not get Gratuity of Rs.10 lakh. What a tragedy; No takers on the issue.

  15. Satya says:

    Why all the LIC & Banking higly organised Unions who were crying on the issue became silent after 23.05.2010. If M.P,s donot represent Public Issues and Unions donot represent their members issues, is it not a slap on the members face!. How poor retirees, who cannot effort to go to courts for redressal , have to respond to the issue?. Let the issue be represented to sensitive Parliamentarians.

  16. A.V.ACHARYA says:

    DEAR SIR,

    IF AS PER CALCULATIONS A PER IS ELIGIBLE TO RECEIVE GRATUITY AMOUNT OF MORE THEN TEN LAKHS , WILL HE BE GIVEN GRATUITY OF MORE THEN 10 LAKHS OR HE WILL NOT GET AS THE LIMIT IS SET AT 10 LAKHS

  17. Kamlesh Gopani says:

    Sir,
    I resigned wef 1st May 2010.I was working for Pvt.Firm.As I have heard that for pvt.firms some ammendment will be there and as per that I will be also eligible for increased limit of Gratuity i.e.10.0 lacs.effective date 24th May 2010 was declared but now it is extended during 2011.Please reply whether I will get in future or not ?
    My email ID is kpgopani@yahoo.com
    Thanks
    Kamlesh Gopani

  18. Sastry says:

    Dear Sir,

    October 1st is observed as International Senior Citizens day. We see lot
    of bill boards regarding Senior Citizens every where and everyday, in
    India. Even in annual budgets of Finance Minister, senior citizens
    will figure. But on enhanced Gratuity Revision from 1.1.2006, Govt /Unions have
    conveniently forgotten about their well being, after retirement.
    Afterall life a is a small journey from womb to the tomb.
    Is the issue dead?

  19. Arya says:

    This is a story about four people named Everybody, Somebody, Anybody, and Nobody.

    THERE WAS AN IMPORTANT JOB TO BE DONE AND EVERYBODY WAS ASKED TO DO IT. EVERYBODY WAS SURE SOMEBODY WOULD DO IT. ANYBODY COULD HAVE DONE IT, BUT NOBODY DID IT.

    SOMEBODY GOT ANGRY ABOUT THAT, BECAUSE IT WAS EVERYBODY’S JOB. EVERYBODY THOUGHT ANYBODY COULD DO IT BUT NOBODY REALIZED THAT EVERYBODY WOULDN’T DO IT.

    IT ENDED UP THAT EVERYBODY BLAMED SOMEBODY WHEN NOBODY DID WHAT ANYBODY COULD HAVE DONE.

    It’s Your Fault; do you find yourself saying this to others and yourselves? This is the road to Freedom from The Blame Game;

    Blame is so common that it is seldom questioned. It is almost a form of bonding ritual among certain people to blame somebody for something every time they speak. People blame their job, various authority figures, the government, the economy – the list is endless.

    When we take responsibility for our feelings, we begin to make significant headway toward inner healing, but the difficulty is that even when we intellectually own our experience, we continue to unconsciously blame. We remain stuck in self-rejection, preventing true acceptance, integration, and release of negativity. One of the essential challenges of any therapy is getting past unconscious blame.

    Let us blame ourselves for the present state.

  20. Arya says:

    As a last resort pensioners of the 01/01/2006 to 24/05/2010 block / their representative Associations may make a personal representation to Prime Minister Shri.Manmohan Singh, as was done by News paper Employees, on the issue of implementation of their Wage Board recommendations recently.

  21. Sastry says:

    Reserve Bank OF India has pointed out recently that since headline and core inflation have overshot even the most pessimistic projections, there is a
    concern that inflation expectations might become unhinged. Reeling
    under high inflation many households do not see any respite even in
    the year(s) ahead. The govt. has done great injustice to a few hundreds
    of PSU retirees belonging to the block 01/01/2006-24/05/2010 by
    implementing INCREASED GRATUITY PAYMENT FROM 24/05/2010 ONLY,
    where as it is made applicable to Central Govt.employees from
    01/01/2006.Even tax benefit were denied to the people in this bracket. Why different yard sticks are applied so much so when the sixth pay commission has
    increased the pay packets of the central govt.employees much more.
    Again this ISSUE is not taken up by Govt/Unions as a matter of
    contention in spite of several representations from the retired employees from
    the block 1.1.2006 to 24.05.2010. The measure reflected the
    insensitivity of the Government to the plight of retirees. It
    appears that the Govt is more concerned with health of Private Sector
    than pensioners retired who were already groaning under the impact of
    the high prices of essential commodities. We request the UNIONS to taken up the issue in the Monsoon session of Parliament. For the employees
    retired its not the end of the road/life time. We know that the
    departed soul will not rest in peace, still we will pray for it.

  22. Dharma says:

    Civil Society activists have have an important role to play in a democracy by taking up critical issues that are ignored by political class or Unions either by default or by design. Let the issue be taken to to eminent people like Sri.Krishna Ayyar…etc as a last resort.

  23. Dharma says:

    I recommend reading the article written today (5th June) in Times of India by Chetan Bhagat.
    Kings ruled our country for thousand years. The people were helpless against the atrocities & misdeed of the king. British Empire with its immense power ruled our country for 250 years then. Luckily, leader like Mahatma Gandhi who fought & left unparallel legacy of nonviolence & liberated our country.
    We thought that we will see golden time ahead because we sent elected representative to run peoples government where people were supposed to have power to establish a system were all have basic rights described in our constitution.
    Unfortunately, those elected leaders became kings who in coalition with corrupt businesspersons gathered huge wealth. These corrupt practices were carried down by the beurocrates to grass root level & unfortunately, no one dares to challenge the corrupt.
    The only way we can abate corruption by challenging the corrupt practices we face in our daily occupations. The present events carried by Anna Hazare & Baba Ramdev are a wakeup call for everyone. Do not bow down to corrupt practices. Challenge them.

  24. Dharma says:

    So we have performed the first anniversary for the hope on payment of revised gratuity, murdered by the GOVT.& THE UNION /ASSN. on 24/05/2010.We know that the departed soul will not rest in peace,still we will pray for it.

  25. Dharma says:

    Roti,Kapada,aur Makan are the issues on which our Unions, Political class, thrives in India. PSU employees are the people belonging to the educated class. While wage revisions are supposed to take care of Roti and Kapada, Gratuity is one time benefit which is supposed to take care of MAKAN. During the last 6 years the prices of MAKAN were systematically hiked by Govt&Private Partnership, in the name of free economy. At present you can purchase an economy type four wheeler with the monies you receive on account of enhanced Gratuity. Even this benefit is denied to the educated PSU employees retired between 1.1.2006 to 23.05.2010 by Govt by citing Private sector employees. Now the educated retired employees have become helpless. Rest of the public are observing keenly how the so called educated class will rescue themselves, in the free economy where vegitable rates compete along with Bombay Stock Exchange Index and all commodities are sold above Maximum Retail Price. Even the minimum auto fare charged to visit nearest hospital is above Rs.50 in Urban Areas. Perform or perish is the slogan. Hee… RAM.

  26. Satya says:

    all of u above

    1). stop shouting and do some social work and collect some money and do some act of co-ordiante make a common committees and apeal to govt collectively
    2). We do not find a single instance where a memorandum was submitted by the retirees to the lawmakers.

    don’t just shout.

  27. K.Ghosh says:

    Mr Sastry’
    Thaks a lot for your advice. As per your suggestion I tried to send my communication to rslib@ sansad.nic.in but unfortunately delivery of the message failed—- it says address rejected. This is for your info.

  28. Sastry says:

    I request all the members to lodge a protest against the Gratuity Amendment Bill 2010 which is made applicable from 24.5.2010. While the earlier Gratuity Amendment Bill 2009 has been made applicable from back date i.e. fr. 01.01.2006 for central govt employees. Lots of employees (private sector) who retired after 1.1.06 to 23.5.2010 will not be benefitted by this recent amendment bill 2010. I therefore request all the people who retired from any PSUs after 1.1.06 to23.5.2010 to lodge a protest at rslib@sansad.nic.in. This is a proper platform. This is the email address of Rajyasabha Petition Committee who listens to public grievances and according recommends to govt. I hope that lots of people to this so that we can make the petition committee to further amendment the effective date of the bill to 1.1.06 instead of 24.5.2010,
    at least during the current budget session 2011.

  29. A MADHAVA REDDY says:

    DEAR SIR ,
    MY NAME IS A MADHAVA REDDY
    I AM WORKING IN LPG DISTRIBUTERSHIP(IOCL)AS A COMPUTER OPRAETER SINCE LAST 15 YEARS , ONE YEAR BACK I WAS REGINED MY JOB,COMPANY GIVE EXPIRIANCE CERTIFICATE ,
    BUT COMPANY NOT GIVE ANY COMPANSETION , COMPANY PROPRITER TOLD IN THIS COMPANY NO PAY GRATTUTE AMT, WE SEND A NOTICE WITH LAYER .COMPANY REPLIED IN COMPANY EMPLOYEES NOT MORE THEN 9 MEMBERS SO WE WILL NOT PAY GRATTITY AMT. BUT IN COMPANY EMPLOYEES NEARLY TWENTY EMPLOYEES . COMPANY NOT MAINTEN SALARY REGISTER, LAST ONE YEAR BACK THEY MAINTEND A RECORD ONLY 9 NUMBERS , BUT IN COMPANY EMPLOYEES MORE THEN 15 NOS. I WANT HELP WITH YOU.
    PLESE GIVE SUGGENTION TO ME SIR

  30. RAVINDRA D PATHAK says:

    in continuation to the earlier brief it is very important to mention here again that the central /state govt employees have been granted ammended gratuity wef 01/01/2006 itself and why psu/board /carporation / are deprived of revised gratuity payment from gratuity ammendment act may 2010?- RAVINDRA D PATHAK SH 22 VIJAYNAGAR A B ROAD INDORE M P 452010

  31. RAVINDRA D PATHAK says:

    we do totally agree with your views since deprived of JUSTIFIED PAYMENT due to ammendment act 2010 just effective from may 2010.there is great discontentmet among psu/ board /cooperative soceity employees over the issue and each & every learned awared employee must take this issue to the appropriate authority even parliamentrary affairs ministery for lawful/ legitimate demand.- RAVINDRA D PATHAK SH 22 VIJAYNAGAR A B ROAD INDORE MP CELL 09179314522 09425912903

  32. tapan kumar sanyal says:

    I retired from Bank’s service on 30.04.2010 . I am the victim of amended gratuity act and the gross income during the current financial year will come over Rs 10.00 lac arising out of salary revision and the I.T will be calculated on 30% slab since i did not get the benefit of amended gratuity act. I therefore request all concern to take up the matter seriously with the Govt so as to get the effect of amended Gratuity act by all not by Govt employee alone.Discrimination and injustice should be looked in to by our hon’ble members of the Parliament.

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