BANKING AFFAIRS

Detailed explanation-1: -The Bill will double the tax-free gratuity to Rs 20 lakh from the current upper ceiling of Rs 10 lakh for the employees of the formal sector. The Gratuity Act is a key social-security legislation for the wage earners in industries, factories and other establishments.

Detailed explanation-2: -The Act provides for payment of gratuity at the rate of 15 days wage s for each completed year of service subject to a maximum of Rs. ten lakh. In the case of seasonal establishment, gratuity is payable at the rate of seven days wages for each season.

Detailed explanation-3: -Parliament on Wednesday approved enhancing the gratuity limit for employees from Rs3. 5 lakh to Rs10 lakh as also the exemption threshold from income tax on it.

Detailed explanation-4: -5 Limit of exemption of death-cum-retirement gratuity under section 10 (10) (iii) has been raised to Rs. 1 lakh in relation to employees who retire of become incapacitated or die on or after 1st April, 1988 or whose employment is terminated on or after that date.

Detailed explanation-5: -ffective from May 24, 2010, the Indian government, through the Ministry of Labour & Employment, increased the gratuity limit under the Payment of Gratuity Act, 1972 ("Gratuity Act") to Rs. 10, 00, 000 from the earlier limit of Rs. 3, 50, 000.