SC States That There Is No Retrospective Effect For 2010 Amendment Which Could Enhance Gratuity Upper Limit As Rs 10 Lakhs

CASE PROCCEDINGS

• The upper-limit of amount of gratuity allocated as per Section 4 of the Payment of Gratuity Act 1972 was augmented as Rupees 10 lakhs from Rupees 3.5 lakh, according to the 2010 amendment.
• The Supreme Court had logically expressed that the 2010 amendment to the Payment of Gratuity Act 1972 was not retrospective.
• Conferring on the Income Tax Act, it was held that the expanse of gratuity acknowledged or received by a member of staff, to the degree that it does not surpass the upper limit under the Payment of Gratuity Act, gets exempted from the tax liability.

CASE RELEVANCES

• The advantage of higher gratuity was one-time accessible to the employees only after the beginning of the Amending Act, observed the Division Bench encompassing Justice Hemant Gupta and AS Bopanna.
• The Court noticed that the instalment of gratuity on a predefined date of retirement was held to be not illegal, referencing to the choice in State Government Pensioners' Association & Ors. v. State of Andhra Pradesh.
• The date of beginning was fixed by the Executive.
• In exercise of force designated by the Amending Act, it was held that it can't be reviewed as the advantage of higher gratuity is one-time accessible to the workers solely after the initiation of the Amending Act.
• The advantage paid to the appellants under the workplace notice isn't qualified for exemption considering explicit language of Section 10(10)(ii) of the Income Tax Act.

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