Finance Minister Arun Jaitley announced on Tuesday the decision to double tax-free gratuity limit to ₹20 lakh. He said that the decision will prove to be beneficial for both public and private sector employees.

In the Budget 2019-2020, the government also announced hiking of tax-free gratuity to ₹20 lakh for employees not covered under the Gratuity Act having service of more than five years.

Arun Jaitley took to Twitter to share the news:

"Income Tax Exemption for Gratuity under Section 10(10)(iii) of the Income Tax Act has been enhanced to ₹20 lakh. Would benefit all PSU employees and other employees not covered by the Payment of Gratuity Act.

In 2018, the Parliament had passed the Payment of Gratuity (Amendment) Bill, 2018 which enabled the government to raise the limit of tax-free gratuity to ₹20 lakh and to also to decide the period of maternity leave qualifying as a continuous service period through an executive order.