Gratuity limit has been enhanced to Rs.20 Lakh

Arun Jaitely said on Tuesday that decision to increase the tax free gratuity limit to 20 Lakh rupees would benefit the public and private sector employees.

Explained that in the budget 2019-20, the government had announced tax free gratuity to the employees who have served for more than five years, to the tune of 20 lakh rupees.

Finance minister Jaitely wrote on Twitter, Income tax exemption for gratuity has been increased to Rs.20 Lakh under section 10(10)(iii) of Income Tax Act. He said that all PSU employees and other private sector employees who are not covered by the Payment of Gratuity Act will get the benefit.

The Parliament passed the Payment of Gratuity Bill 2018 last year, which gave an opportunity to the government to increase the tax-free gratuity limit to 20 lakh rupees.

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