The government has raised the income tax exemption limit on gratuity from Rs. 3.5 lakh to Rs. 10 lakh, with effect from May 24.
“Employees who retire, become incapacitated, are terminated or who die on or after May 24, 2010 will get I-T exemption for gratuity up to Rs. 10 lakh,” a Finance Ministry official said here on Friday. The Ministry notified a rule in this regard. Earlier, Parliament approved raising the limit of gratuity for I-T exemption. The Payment of Gratuity (Amendment) Bill, 2010, was passed in the budget session.
While the Sixth Pay Commission raised the limit for Central government employees, the Cabinet later enhanced the ceiling for the private sector workforce as well.
source ;The hindu
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