Gratuity limit increased from Rs 10 lakh to Rs 20 lakh for these Sarkari employees

Sunil Dhawan
Gratuity limit, Government Employees, Payment of Gratuity Act, 1972, gratuity received by employees, exempt up to Rs 20 lakh

Gratuity Limit: For the employees of Navodaya Vidyalaya Samiti (NVS), there are two major announcements regarding their employment. Navodaya Vidyalaya Samiti is an Autonomous Body under the Ministry of Human Resource Development (MHRD) and the ceiling limit of payment of gratuity to the employees of NVS stood at Rs 10 lakh.

Through a notification dated February 24, 2020, the government has enhanced the ceiling limit of payment of gratuity to the employees of NVS from Rs 10 lakh to Rs 20 lakh effective March 29, 2018, in respect of employees who joined NVS prior to Jan 1, 2004.

Further, it is also notified by the government that the NVS Payment of Gratuity Rules 2007 has been scrapped and henceforth the payment of gratuity under the Payment of Gratuity Act 1972 will be applicable for employees of NVS who joined NVS prior to 01.01.2004.

The gratuity received by Government Employees (Other than employees of statutory corporations)
is fully exempt in the hands of those employees in the year of receipt. However, death -cum-retirement gratuity received by other employees who are covered under Gratuity Act, 1972, other than a government employee, and even by those who are not covered under the Act is exempt up to Rs 20 lakh, subject to certain conditions.

Earlier the Ministry of Finance had enhanced the income tax exemption for gratuity under section 10 (10) (iii) of the Income Tax Act, 1961 to Rs. 20 lakh. The ceiling of Gratuity amount under the Payment of Gratuity Act, 1972 has been raised from time to time keeping in view over-all economic condition and employers capacity to pay and the salaries of the employees. The enhancement of the ceiling of gratuity was made through Notification dated 29.03.2018 under which the gratuity amount ceiling was increased from Rs.10 lakh to 20 lakh w.e.f. 29.3.2018. Now, the employees of NVS who joined NVS prior to 01.01.2004 have also been brought under the Payment of Gratuity Act 1972 and the limit for them also stands at Rs 20 lakh.

The National Policy on Education-1986 envisaged setting up of residential schools, to be called Jawahar Navodaya Vidyalayas that would bring out the best of rural talent. Navodaya Vidyalayas draw their students strength from talented children, selected on the basis of a merit test, called the Jawahar Navodaya Vidyalaya Selection Test,  designed, developed and conducted initially by NCERT  and now by CBSE. The state government has to offer cost-free land for permanent construction and rent-free temporary buildings for the setting up of a Navodaya Vidyalaya.