Tax-free gratuity till ₹20 lakh for pvt sector
TIMES NEWS NETWORK 23.03.2018
New Delhi: Parliament cleared a bill on Thursday that will pave the way for doubling tax-free gratuity limit to ₹20 lakh for private sector employees. While the retirement benefit for central government employees was raised from ₹10 lakh to ₹20 lakh when the recommendations of the Seventh Pay Commission were implemented, private sector employees were left out and the amendment to the law will result in tax saving of around ₹3 lakh for those retiring in the coming months.
The bill, cleared by the Rajya Sabha on Thursday, also empowers the government to fix the period of maternity leave and the tax-free gratuity amount through an executive order, a move that will provide it flexibility in undertaking changes in the future.
“Once the new law is in place, those getting gratuity in excess of ₹20 lakh will have to pay tax only on the amount above the threshold,” Kuldip Kumar, partner at PricewaterhouseCoopers, said.
The Lok Sabha had cleared the bill last week.
After the passage of the bill, Prime Minister Narendra Modi tweeted, “A significant pro-people measure passed in Parliament. Will benefit lakhs of Indians.”
Gratuity bill passed without any debate
There was a semblance of normalcy in the Rajya Sabha for 13 minutes on Thursday morning, which saw the bill to amend the gratuity law being passed without any discussion, before it once again descended into chaos and was adjourned for the 14th straight day.
The Rajya Sabha proceedings began at 11am with the routine tabling of listed statements, papers and reports, and brief statements by TDP member C M Ramesh and AIADMKMPV Maitreyan on their demands for special status for Andhra Pradesh and setting up of the Cauvery river management board, respectively.
Chairman M Venkaiah Naidu said it was decided during his meeting with leaders of various parties in the morning that the Upper House would take up the crucial Payment of Gratuity (Amendment) Bill, which was earlier passed by the Lok Sabha, because it was “very important” for workers.
Labour minister SantoshKumar Gangwar then moved the bill, which was passed by a voice vote without any debate or amendments being moved.
The amendment bill empowers the government to revise the limit from time to time with the increase in wage and inflation and future pay commissions.
The Payment of Gratuity Act, 1972, was enacted to provide for gratuity payment to employees working in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments. The law is applicable to employees who have completed at least five years of continuous service in an establishment that employs 10 or more people.
TIMES NEWS NETWORK 23.03.2018
New Delhi: Parliament cleared a bill on Thursday that will pave the way for doubling tax-free gratuity limit to ₹20 lakh for private sector employees. While the retirement benefit for central government employees was raised from ₹10 lakh to ₹20 lakh when the recommendations of the Seventh Pay Commission were implemented, private sector employees were left out and the amendment to the law will result in tax saving of around ₹3 lakh for those retiring in the coming months.
The bill, cleared by the Rajya Sabha on Thursday, also empowers the government to fix the period of maternity leave and the tax-free gratuity amount through an executive order, a move that will provide it flexibility in undertaking changes in the future.
“Once the new law is in place, those getting gratuity in excess of ₹20 lakh will have to pay tax only on the amount above the threshold,” Kuldip Kumar, partner at PricewaterhouseCoopers, said.
The Lok Sabha had cleared the bill last week.
After the passage of the bill, Prime Minister Narendra Modi tweeted, “A significant pro-people measure passed in Parliament. Will benefit lakhs of Indians.”
Gratuity bill passed without any debate
There was a semblance of normalcy in the Rajya Sabha for 13 minutes on Thursday morning, which saw the bill to amend the gratuity law being passed without any discussion, before it once again descended into chaos and was adjourned for the 14th straight day.
The Rajya Sabha proceedings began at 11am with the routine tabling of listed statements, papers and reports, and brief statements by TDP member C M Ramesh and AIADMKMPV Maitreyan on their demands for special status for Andhra Pradesh and setting up of the Cauvery river management board, respectively.
Chairman M Venkaiah Naidu said it was decided during his meeting with leaders of various parties in the morning that the Upper House would take up the crucial Payment of Gratuity (Amendment) Bill, which was earlier passed by the Lok Sabha, because it was “very important” for workers.
Labour minister SantoshKumar Gangwar then moved the bill, which was passed by a voice vote without any debate or amendments being moved.
The amendment bill empowers the government to revise the limit from time to time with the increase in wage and inflation and future pay commissions.
The Payment of Gratuity Act, 1972, was enacted to provide for gratuity payment to employees working in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments. The law is applicable to employees who have completed at least five years of continuous service in an establishment that employs 10 or more people.
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