Tax Free Gratuity Limit: Modi government has taken a big decision in the cabinet meeting. The limit of tax free gratuity has been increased to Rs 25 lakh. Earlier this limit was Rs 20 lakh.
Tax Free Gratuity Limit: A big decision regarding gratuity has been taken in the cabinet meeting. Modi government has increased the tax free limit for gratuity to Rs 25 lakh. Now there will be no tax on gratuity up to this amount. Earlier its limit was Rs 20 lakh. In the notification dated March 8, 2019, CBDT had increased the tax free gratuity limit from Rs 10 lakh to Rs 20 lakh.
4% increase in dearness allowance
Apart from this, increase in dearness allowance for central employees and pensioners has also been approved. The Union Cabinet has approved 4 percent increase in dearness allowance. Now employees will get 50 percent dearness allowance. This dearness allowance will be applicable from January 1, 2024. It will be credited along with the salary at the end of March. A total of two months arrears will also be added to this. This is the fourth consecutive time that dearness allowance has increased by 4 percent. The increase in dearness allowance will increase the burden on the government exchequer by Rs 12,868.72.
#Cabinet has approved the decision to hike dearness allowance for central government employees and pensioners by 4 %.
▪️Now the #DA will reach to 50%.
▪️House Rent allowance will be increased. Now gratuity limit has reached to 25 lakh rupees – Union Minister @PiyushGoyal… pic.twitter.com/jRcmR88W5y
— All India Radio News (@airnewsalerts) March 7, 2024
DA will become 0 after 50 percent
Central employees will get 50 percent DA from January 2024. But, after this the dearness allowance will be reduced to zero. After this the calculation of dearness allowance will start from 0. 50 percent DA will be added to the basic salary of the employees. Suppose if the minimum basic salary of an employee according to his pay band is Rs 18000, then 50 percent of Rs 9000 will be added to his salary.
