Gratuity Act Ammendment India 2010 (Calculation and Payment)

This is good news for all employees specially government employees. The Gratuity limit has been raised from 3.5 lacs to 10 lacs. This will give advantage to both private and public sector employees. According to this new amendment the 10 lacs on gratuity is Tax-free. I have given the details of the new Gratuity Act Amendment India 2010 and Gratuity calculation below:

On Thursday, in the lead of PM Manmohan Singh, this decision was taken at a cabinet meeting. This proposal of Labor and Employment Ministry has been given approval. Although many state governments has provided this type of advantage earlier. It is better decision regarding gratuity act to raise the Gratuity limit.

CCEA has taken decision to open the 137 General Nursing and midwife school to remove the scarcity of nurses and midwives. These schools will be made in Bihar, Chhattisgarh, Madhya Pradesh, UP, Uttarakhand, Rajasthan, Orissa, Himachal Pradesh and others. The amount of 1370 crores will be spent on this planning.

For the Gratuity calculation the gratuity calculation formula is

1. basic/26 x 15 days x number of years of service

OR

2. BASIC + DA (Last Pay drawn) X 15 /26 X No. OF YEARS WORKS

Gratuity is to be paid to any employee only he provides service for a minimum time of five years at a stretch with his employer in company. The Gratuity calculation is done as per the last average remuneration drawn and time in years served by an employee.

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Comments/Queries

( 482 Comments so far )

• SSBABU
  
  May 21, 2010 at 03:34:pm

  There is lot of speculation about the date from which the enhanced rate shall be applicable .Kindly confirm this date.
• CJG
  
  May 21, 2010 at 04:09:pm

  With pipe line gas prices now increasing, auto/taxi fares also increasing, food items and vege prices increasing even more, how does one expect a comman man to survive. The Govt. says aam aadmi when absolutely nothing is done to relieve them of their pain and suffering. IT benefits have also been passed on to higher wage earners by reducing their tax liability. We have to pay all our taxes in time but when its time for the Govt. to implement any of their pay/gratuity promises, they prefer to take their own time. Please look into our financial woes and implement all your packages including gratuity arrears for the retirees on a war footing.
• D N GARG
  
  May 21, 2010 at 08:01:pm

  Pl. inform me to effective date of enhanced gratuity in gratuity amendment act 2010 passed by govt. of india.
• Gadadhar Mukherjee
  
  May 21, 2010 at 10:35:pm

  whether contractual employee who covers 5 years continuous service on renewal of contract without break is eligible for gratuity ?
• Anil
  
  May 22, 2010 at 01:59:pm

  It will be from date of notification and amendment is yet to be notified.
• PRK BABU
  
  May 22, 2010 at 03:45:pm

  PLEASE ADVISE THE DATE OF EFFECT OF THE ENHANCEMENT IN GRATUITY PAYABLE TO EMPLOYEES
• PRK BABU
  
  May 22, 2010 at 03:40:pm

  PLEASE FURNISH THE DATE FROM WHICH THE NEW AMENDMENT OF ENHANCEMENT IS EFFECTIVE.
• Nandan
  
  May 22, 2010 at 09:01:pm

  Please confirm the date from which this enhanced amendment of Rs.10 lacs in Gratuity limit is exempt from income tax beyond Rs.3.5 lacs in case of employees of Public Sector Undertakings which is not a purely Govt. undertaking.
• Pls tell me the effective date of the gratuity amendment act 2010
  
  May 22, 2010 at 09:11:pm

  Would like to know the effective date of the amendment. Would be grateful if informed earliest.
• Raghavan
  
  May 22, 2010 at 11:51:pm

  Most likely the gratuity amendment act 2010 will be effective from May, 2010 with no retrospective benefits.
• Niraj Gupta
  
  May 23, 2010 at 06:07:pm

  my mother retired from his service on 31.3.2010.I want to know weather the new gratuity act 2010 will apply to her.and if yes then what would be the effective date…she was working in PSWC.
• Akhilesh
  
  May 24, 2010 at 02:52:pm

  These days, companies are going for 5 days week pattern, In that case, does the gratuty calculation if anyways impacted, i mean using 22 days instead of 26 days for calculatinh the gratuty. Please suggest.
• K.K.Chowdhury
  
  May 25, 2010 at 09:25:am

  dear sir,
  pl let me know if there is any deviation in calculation of gratuity from Payment of Gratuity Act the Income Tax exemption upto 10 lakhs may be available
• T R SANGAR
  
  May 25, 2010 at 11:50:am

  IN CASE OF CENTRAL GOVT. EMPLOYEES, THE EFFECTIVE DATE WAS 01.01.2006 EVEN THOUGH THE SIXTH PAY COMMISSION RECOMMENDATIONS WERE ACCEPTED IN 2008. AS SUCH THE EFECTIVE DATE IN CASE OF THIS AMENDMENT SHOULD BE FROM 01.01.2006 SO THAT THERE IS NO DISPARITY BETWWEN THE EMPLOYEES OF CENTRAL GOVT., PUBLICE SECTOR UNDERTAKINGS AND OTHER SEMI GOVT OR PRIVATE SECTOR.
• latha sudhakaran
  
  May 25, 2010 at 03:53:pm

  what is the effective date for gratuity amendment act 2010
  since i retired on Apr 2009 whether i receive my balance
  enhanced gratuity amount of Rs6.5 lakhs
• JITENDRA
  
  May 25, 2010 at 04:58:pm

  New act should be effective from 1st June2010,&calculation formula aso shoulds be changed
• peri subbarao
  
  May 25, 2010 at 08:11:pm

  The effective date for the central govt employees is 1st nov 2006. Tsame should be extended to all with regard to gratuity payment. However pl let me know the effective date.Lakhs of employyees are eagerly awaiting to know. PERI SUBBARAO SBH.
• Adeeti
  
  May 26, 2010 at 02:58:pm

  i am resigning after completing 4.11 month with current oragnisation, i just wanted to know whether i will get the garatuity? i know it is payable after 5 yrs but i heard it can be consider after completing 4.7 yrs with the organisation.
• knr reddy
  
  May 26, 2010 at 04:12:pm

  pl confirm the effective date of new gratuity ammendment act.
• PRASANNA KUMAR M.S
  
  May 26, 2010 at 05:42:pm

  I RETIRED FROM CANARA BANK SERVICE ON 28/02/2010 ON SUPERANNUATION AND GOT RS 3.5 LAKHS AS GRATUITY AMOUNT WETHER ELIGIBLE REVISED GRATUITY AMOUNT OF RS 6.5 LAKHS AS PER AMENDMENT ACT 2010