Parliament on Thursday cleared a bill that will pave the way for doubling the tax-free gratuity limit to Rs 20 lakh for private sector employees. While the retirement benefit for central government employees was raised from Rs 10 lakh to Rs 20 lakh when the recommendations of the 7th Pay Commission were implemented, private sector employees were left out and the amendment to the law will result in a tax saving of around Rs 3 lakh for those retiring in the coming months.

Parliament on Thursday cleared a bill that will pave the way for doubling the tax-free gratuity limit to Rs 20 lakh for private sector employees. While the retirement benefit for central government employees was raised from Rs 10 lakh to Rs 20 lakh when the recommendations of the 7th Pay Commission were implemented, private sector employees were left out and the amendment to the law will result in a tax saving of around Rs 3 lakh for those retiring in the coming months.