Lok Sabha today passed the amendment in Payment of Gratuity Act to increase the Gratuity ceiling to Rs.20 lacs. The existing limit for gratuity was Rs.10 lacs.

After implementation of seventh pay commission, gratuity ceiling was increased from Rs.10 lacs to Rs.20 lacs for Central Government employees. Private Sector employees including bank employees were demanding for increase in the gratuity limit.

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The bill passed today, notifies the period of maternity leave as part of continuous service and proposes to empower the central government to notify the gratuity ceiling from time to time without amending the law.

An employee becomes eligible for gratuity if he completes at least five years of continuous service in an establishment.

The bill will now be placed in Rajya Sabha for approval and after the consent of President, the increased gratuity limit shall become effective.

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