Major Decision by Modi Government on Gratuity: No Tax Up to 25 Lakhs
In a recent Cabinet meeting, a significant decision was made regarding gratuity. The Modi government has increased the tax-free limit for gratuity to 25 lakhs. Now, no tax will be levied on gratuity amounts up to this limit, whereas previously the limit was set at 20 lakhs. The CBDT had increased the tax-free gratuity limit from 10 lakhs to 20 lakhs in a notification dated March 8, 2019. 4% Hike in Dearness Allowance In addition to this, approval has been granted for an increase in dearness allowance for central government employees and pensioners. The Central Cabinet has approved a 4% increase in dearness allowance, bringing the total dearness allowance to 50%. This dearness allowance will be applicable from January 1, 2024, and will be credited along with the March salary. Arrears for two months will also be included in this. This marks the fourth consecutive increase in dearness allowance by 4%, leading to a burden of 12,868.72 rupees on the government treasury. DA to Become