The notification follows changes in the Payment of Gratuity Act which had empowered the government to fix the ceiling of the retirement benefit through an executive order.
The amendment bill approved by Parliament earlier in the month had also empowered the government to fix the period of maternity leave.
News on Gratuity Notification
Click HERE to See How UPA government had cheated Bankers in year 2010
Here are the key highlights of Payment of Gratuity Act
- The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons.
- The main purpose for enacting this Act is to provide social security to workman after retirement, whether retirement is a result of superannuation, or physical disablement or impairment of vital part of the body.
- Payment of Gratuity Act, 1972 is an important social security legislation to wage earning population in industries, factories and establishments.
- The present upper ceiling on gratuity amount under the Act is Rs 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar.
- Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs 10 Lakh.
- However, with implementation of 7th Central Pay Commission, in case of Government servants, the ceiling has been raised to Rs 20 Lakh.
SC gives gratuity boost to daily wagers who get regularised
Economic Times 30th march 2018
A bench of Justices R K Agrawal and Abhay Manohar Sapre quashed the order of the Chhattisgarh HC which had held that gratuity was to be decided on the basis of tenure of service on regular job and period of daily wage earning was not to be considered. The HC had dismissed a plea of a state government employee, Netram Sahu, who had worked continuously for around 22 years as daily wager and thereafter his job was regularised and he worked for another 3 years before retirement.
The state government took the stand that the employee, working with the water resources department, could not be held eligible to claim the gratuity because out of the total period of 25 years of his service, he worked 22 years as daily wager and only 3 years as regular employee. It urged that he could not be said to have worked continuously for a period of 5 years as provided under the Act so as to make him eligible to claim gratuity.
There was a new in THE HINDU dated June 6, 2010 reproduced below "Payment of Gratuity Act has substituted Rs. 3.50 lakh to Rs. 10 lakh in Sec. 4 of that Act. When does it come into effect?
Payment of Gratuity (Amendment) Act, 2010, has been amended coming into force with effect from a date to be notified by the Central Government. The Amendment Act itself became law with effect from May 17, 2010. Notification No.S.O. 1217(E) dated May 24, 2010, appoints this date, that is May 24, 2010, as the date on which the Amendment Act comes into force. Only retirees on or after May 24, 2010, would have the benefit of higher ceiling of Rs. 10 lakh under Sec. 10(10)(ii) of the Act.
Sec. 10(10)(ii) of the Income-tax Act is applicable for those governed by the Payment of Gratuity Act. Exemption will be the amount vide sub-sections (2) and (3) of Sec. 4 of the Payment of Gratuity Act or the ceiling, whichever is lower.
Government servants were already exempt under Sec. 10(10)(i) applicable to them up to Rs. 10 lakh, when the ceiling was raised for them from Rs. 3.50 lakh by a notification dated September 2, 2008, amending Rule 50 with retrospective effect from January 1, 2006. The delay of nearly three-and-half years as between Government servants and those covered by Payment of Gratuity Act for this ceiling is not justified because terminal benefits do not have the character of income and they are only deemed as income, subject to ceiling under Sec. 10(10) adopting what is given to the government servants as a benchmark of reasonable limit for exemption.
For others, relief would have to accord with the formula under Sec. 10(10)(iii), subject to the ceiling notified by the Central Government under this provision. The limit was raised for them to Rs. 3.50 lakh vide Notification No. 10772 dated January 20, 1999, with retrospective effect from September 24, 1997. Increase in limit for this class of persons is now awaited.
There is no justification for discrimination as between different classes of employees with reference to retirement date between government servants and others.
Since no guidelines as regards the choice of date for extending the ceiling are available in the statute, one would expect that the decision taken for government servants as regards tax treatment of retirement benefits should have been made applicable for others as well with effect from the same date" THIS ISSUES NEEDS TO BE STUDIED IN DEPTH BEFORE IT'S READY TO FILED AND TO DECIDE THE JURISDICTION. PLEASE don't hesitate to send comments with email at bhagwandassahujesq@yahoo.com (1) Your name,(2) Whatsapp no.,(3)Name of the Bank, (4)Date of joining, (5)Date of confirmation,(6) Date of retirement, (7) last place of posting, (8)last position/designation/scale,(9) Actual amount of Pension, (10) How much you get if payment date becomes effective from January 1, 2006, (11) Email address, (12) Complete postal address of your residence, (13) How many number of other applicants can join with you in this noble cause
There was a new in THE HINDU dated June 6, 2010 reproduced below "Payment of Gratuity Act has substituted Rs. 3.50 lakh to Rs. 10 lakh in Sec. 4 of that Act. When does it come into effect?
Payment of Gratuity (Amendment) Act, 2010, has been amended coming into force with effect from a date to be notified by the Central Government. The Amendment Act itself became law with effect from May 17, 2010. Notification No.S.O. 1217(E) dated May 24, 2010, appoints this date, that is May 24, 2010, as the date on which the Amendment Act comes into force. Only retirees on or after May 24, 2010, would have the benefit of higher ceiling of Rs. 10 lakh under Sec. 10(10)(ii) of the Act.
Sec. 10(10)(ii) of the Income-tax Act is applicable for those governed by the Payment of Gratuity Act. Exemption will be the amount vide sub-sections (2) and (3) of Sec. 4 of the Payment of Gratuity Act or the ceiling, whichever is lower.
Government servants were already exempt under Sec. 10(10)(i) applicable to them up to Rs. 10 lakh, when the ceiling was raised for them from Rs. 3.50 lakh by a notification dated September 2, 2008, amending Rule 50 with retrospective effect from January 1, 2006. The delay of nearly three-and-half years as between Government servants and those covered by Payment of Gratuity Act for this ceiling is not justified because terminal benefits do not have the character of income and they are only deemed as income, subject to ceiling under Sec. 10(10) adopting what is given to the government servants as a benchmark of reasonable limit for exemption.
For others, relief would have to accord with the formula under Sec. 10(10)(iii), subject to the ceiling notified by the Central Government under this provision. The limit was raised for them to Rs. 3.50 lakh vide Notification No. 10772 dated January 20, 1999, with retrospective effect from September 24, 1997. Increase in limit for this class of persons is now awaited.
There is no justification for discrimination as between different classes of employees with reference to retirement date between government servants and others.
Since no guidelines as regards the choice of date for extending the ceiling are available in the statute, one would expect that the decision taken for government servants as regards tax treatment of retirement benefits should have been made applicable for others as well with effect from the same date" THIS ISSUES NEEDS TO BE STUDIED IN DEPTH BEFORE IT'S READY TO FILED AND TO DECIDE THE JURISDICTION. PLEASE don't hesitate to send comments with email at bhagwandassahujesq@yahoo.com (1) Your name,(2) Whatsapp no.,(3)Name of the Bank, (4)Date of joining, (5)Date of confirmation,(6) Date of retirement, (7) last place of posting, (8)last position/designation/scale,(9) Actual amount of Pension, (10) How much you get if payment date becomes effective from January 1, 2006, (11) Email address, (12) Complete postal address of your residence, (13) How many number of other applicants can join with you in this noble cause
Whether date of birth has anything to do for those retire in March? Suppose the DoB is 15th, or 25th the person retires at the end of the month as per bank's circular instructions. Whether such persons eligible?
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