New Delhi, March 7: Union Finance Minister Arun Jaitley on Wednesday announced that the government has hiked income tax exemption limit for gratuity to Rs 20 lakh. In a tweet, Jaitley said the decision to double tax-free gratuity limit will benefit public and private sector employees. The hike in income tax exemption limit for gratuity will benefit lakhs of salaried employees, who are now and those who retired over the last 12 months.

"Income Tax Exemption for Gratuity under Section 10(10)(iii) of the Income Tax Act has been enhanced to Rs 20 lakh. Would benefit all PSU employees and other employees not covered by Payment of Gratuity Act (sic)," Jaitley said in a tweet. The government, in the interim budget 2019-20, had announced hiking of tax-free gratuity to Rs 20 lakh for employees not covered under the Gratuity Act having service of more than five years. Income Tax Payers to Get Refunds Within 24 Hours.

The government had also announced an increase of gratuity limit from Rs 10 lakh to Rs 30 lakh from the next fiscal. Parliament last year passed Payment of Gratuity (Amendment) Bill, 2018, enabling the government to raise the limit of tax-free gratuity to Rs 20 lakh and to fix the period of maternity leave qualifying as continuous service period through an executive order.

(The above story first appeared on LatestLY on Mar 07, 2019 01:02 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).