1. Payment of Gratuity (Amendment) Bill, 2017: PM Modi Cabinet gives nod; will also revise gratuity ceiling of private employees

Payment of Gratuity (Amendment) Bill, 2017: PM Modi Cabinet gives nod; will also revise gratuity ceiling of private employees

With implementation of the 7th Central Pay Commission, the gratuity ceiling for government servants got revised, from Rs 10 lakh to Rs 20 lakh. The amendment seeks to revise the ceiling for employees in the private sector too.

By: | Updated: September 12, 2017 6:22 PM
introduction of Payment of Gratuity (Amendment) Bill 2017 approved, revise gratuity ceiling of private employees, Union Cabinet, Narendra Modi The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons.

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday gave its approval for introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament. With implementation of the 7th Central Pay Commission, the gratuity ceiling for government servants got revised, from Rs 10 lakh to Rs 20 lakh. The Amendment seeks to revise the ceiling for employees in the private sector too, considering inflation and wage increase. Thus, the Amendment will increase the maximum limit of gratuity of employees, in the private sector and in public sector undertakings/ autonomous organizations under the government who are not covered under CCS (Pension) Rules, at par with the Central government employees.

It may be noted that the Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons. The main purpose for enacting this Act is to provide social security to workmen after retirement, whether retirement is a result of the rules of superannuation, or physical disablement or impairment of vital part of the body. Therefore, the Payment of Gratuity Act, 1972 is an important social security legislation to wage earning population in industries, factories and establishments.

The present upper ceiling on gratuity amount under the Act is Rs 10 lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar. Before implementation of the 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs 10 lakh. However, with implementation of the 7th Central Pay Commission, in case of government servants, the ceiling now is Rs 20 lakh, effective from 1.1.2016.

Therefore, considering the inflation and wage increase even in case of employees engaged in private sector, the government is of the view that the entitlement of gratuity should be revised for employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the government initiated the process for amendment to Payment of Gratuity Act, 1972.

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    Gulshan gupta
    Sep 18, 2017 at 8:25 pm
    Has the CC approved it to be implemented weg 01.01 .16. what are the other features of the amendment other than raising the monetary limit because if other things remain same then nothing will benifited. It is also uncertain when is it going to implement either by ordinance or through parliament in next session.
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      Venkataramanan
      Sep 16, 2017 at 10:49 pm
      Implementation will be from 01 01 2016 as per sanction to Govt employees.
      Reply
      1. V
        VenkataramananR
        Sep 16, 2017 at 10:23 pm
        It should be implemented wed 01012016 as given to govt employees.
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          BHOOTRA
          Sep 15, 2017 at 11:08 am
          Gratuity amendment from which date for Bankers (PSU)
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            richa
            Sep 15, 2017 at 11:04 am
            NOTIFIcation to bhejo
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              H R Sheshadri Dixit
              Sep 14, 2017 at 6:00 pm
              When this bill will be placed in the Parliament for approval ?After that it has to be signed by the President .So what should be actual date of implementation and from which day it will be effective for Public Sector employees. I am retired from service on 30th July 2017 this year as a Public sector employee is there any possibility to get the advantage of this change.Kindly let me know the date of implementation of 20 Lakhs gratuity to Public sector employees because I retired from service on 31/07/2017 Kindly replay. thanking you.
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                natarajan
                Sep 15, 2017 at 6:35 am
                I am Natarajan Seetharaman, retired from a PSE 20 years back and fought for implementation from the same date on which Government servant got the benefit. Based on my suggestion in PMO's grievance cell in December, 2016 this decision had been taken by the Government. The amendment brings the revision of the ceiling under the rule making powers of the government, so that it can be given retrospective effect from the date of revision to government employees Earlier as it as under the act, it was given only prospective effect, with a time gap of 3 to four years. I had also suggested for revision on annual basis, instead of once in ten years. You can therefore hope that the date of revision would be the same i.e january 1st 2016 and derive the benefit.
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                Debabrata Choudhury
                Sep 14, 2017 at 4:36 pm
                Dear Sir/ Madam, I am not clear about days 15 or 26 per year???? could you please inform me???
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                  sethuraman vajravadivelu
                  Sep 14, 2017 at 7:45 pm
                  You get 15 days ry ( basic DA) pay per no of serving years as gratuity. ie, per day ry is your monthly ry(Basic DA) divided by 26. Gratuity monthly ry(basic DA) /26 X 15 days X no of years of service. Hope this clarifies
                  Reply
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                    sethuraman vajravadivelu
                    Sep 14, 2017 at 7:46 pm
                    You get 15 days ry ( basic DA) pay per no of serving years as gratuity. ie, per day ry is your monthly ry(Basic DA) divided by 26. Gratuity monthly ry(basic DA) /26 X 15 days X no of years of service. Hope this clarifies
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                  CHANDRA BABU
                  Sep 14, 2017 at 10:38 am
                  Is it applicable to bank employees?
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                    DEVASIS GOSWAMI
                    Sep 13, 2017 at 2:41 pm
                    When this bill will be placed in the Parliament for approval ?After that it has to be signed by the President .So what should be actual date of implementation and from which day it will be effective for Private Sector employees.If I retire on 30th Nov this year as a private sector employee is there any possibility to get the advantage of this change.
                    Reply
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                      Sunil Kumar Juluru
                      Sep 13, 2017 at 12:53 pm
                      If I retire in December, will I be able to get increased amount of gratuity i.e and 20 lakhs
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                        Debabrata Choudhury
                        Sep 14, 2017 at 4:39 pm
                        it is effect from 01/01/2016
                        Reply
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                          kamal
                          Sep 14, 2017 at 7:58 pm
                          i retired on 30 june2017 from a pvt company. will i get the revised gratuity?
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                        bala
                        Sep 13, 2017 at 12:14 pm
                        reg. gratuity,,cabinet approved the recommendation wef 1.1.2016 but not mentioned the retrospective effect /or prospective
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                          Ravindra kumar
                          Sep 13, 2017 at 11:55 am
                          Will i get the increased amount of gratuity whil i retired in aug 2016
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                            S P Singhal
                            Sep 13, 2017 at 11:26 am
                            Pls inform from which date the revised ceiling of Rs 20.00 lakh will be made applicable? It is mentioned in the amendment approved by the cabinet yesterday that the facility of revised limit of gratuity is extended to private sector on par with Central Govt. employees. In the light of this please clarify.
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                              chetanputhli
                              Sep 12, 2017 at 9:47 pm
                              Good
                              Reply
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                                chetanputhli
                                Sep 12, 2017 at 9:46 pm
                                Good
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                                  Narpal Singh
                                  Sep 12, 2017 at 7:55 pm
                                  It's a very good move . Any Idea what will be the next process and what will be the implementation date of this change ?
                                  Reply
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