Gratuity limit hike to Rs 10 lakh gets Parliamentary nod

Economic Times says :


NEW DELHI: Parliament on Wednesday approved enhancing the gratuity limit for employees from Rs 3.5 lakh to Rs 10 lakh as also the exemption threshold from income tax on it.

While the Lok Sabha had passed the Payment of Gratuity (Amendment) Bill 2010 on Monday, the Rajya Sabha put its stamp of approval on it today.



Labour Minister Mallikarjun Kharge, replying to a brief debate on the bill said the legislative measure also provides that the income tax exemption limit has commensurately been increased to Rs 10 lakh from Rs 3.5 lakh earlier. 

On demands for giving a retrospective effect to the measure, Kharge said, "We want to give a lot, but there should be a capacity (of the employer) to pay and it should reach the beneficiaries."

He gave the same reason for not accepting demands from the members to improve the formula for calculation of gratuity.

The bill was brought following demands from trade unions and others to remove the ceiling or increase the maximum payable amount, which was fixed in 1997.

Earlier participating in the debate, Congress member and veteran trade unionist G Sanjeeva Reddy said payment of gratuity should be done with retrospective effect.

CPI(M) member T K Rangarajan said seasonal workers are not getting benefit and therefore their interests should also be protected.

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The Hindu says :

Special Correspondent

NEW DELHI: Parliament on Wednesday approved the increase in the gratuity limit for employees from Rs.3.5 lakh to Rs.10 lakh, with the Rajya Sabha approving the legislation by voice vote.

The Lok Sabha passed the Payment of Gratuity (Amendment) Bill, 2010, on Monday.

Backing from all members

While all members supported the Bill, G. Sanjeeva Reddy of the Congress and R.C. Singh of the CPI wanted it to take effect from 2006 when it was first proposed.

However, Labour Minister Mallikarjun Kharge said that while the government wanted to give a lot, the employer should have the capacity to pay. Hence, the government did not accept the demand to improve the formula for calculating gratuity.

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www.taxguru.in says

A bill to raise the ceiling of gratuity for employees to Rs 10 lakh from Rs 3.5 lakh was passed by the Lok Sabha without discussion today. The House, which witnessed an opposition furore over the 2G spectrum “scam” and reports about alleged involvement of a central minister in an illegal arms deal, also adopted theEmployees’ State Insurance (Amendment) Bill 2009 without any debate.

The Payment of Gratuity (Amendment) Bill 2010, introduced by Minister of State for Labour Harish Rawat last month, was passed by a voice vote as AIADMK and some CPI(M) members trooped into the well raising slogans.

The bill seeks to amend the Gratuity Act to enhance the amount of gratuity payable to an employee from Rs 3.5 lakh to Rs 10 lakh. The legislation was brought following demands from trade unions and others to remove the ceiling or increase the maximum payable amount, which was fixed in 1997.

The House also passed the Employees’ State Insurance (Amendment) Bill 2009 to provide for medicare to unorganised sector workers, especially those below the poverty line.

The bill, proposes that the Employees’ State Insurance Corporation (ESIC) should participate in the Rashtriya Swasthya Bima Yojana to cover BPL workers in the unorganised sector.

The Statement of Objects and Reasons of the bill said it also proposed to increase the age limit of dependents from 18 to 21 years and provide for claims for accidents occurring at work or while going to work.

The legislation was brought to the House in 2008 to replace an ordinance and was then sent to the concerned parliamentary standing committee.