The government on Wednesday said that it has doubled the income tax exemption limit for gratuity to Rs 20 Lakh, a move that will benefit lakhs of salaried employees, who are now retiring as well as those who retired over the last 12 months.

“Income tax exemption for gratuity under section 10 10)(iii) of the Income Tax Act has been enhanced to Rs 20 Lakh. Would benefit all PSU employees and other employees not covered by Payment of Gratuity Act,”finance minister Arun Jaitley tweeted. The government was, however, silent on the date from which the exemption would be applicable.

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Gratuity Act applies to all employees working in an organisation that employs 10 or more employees during the year. The higher exemption follows an amendment to the law that allowed for doubling the ceiling for all employees, which the labour ministry said was effective March 29, 2018.

The announcement on tax exemption, which has come 11 months after the notification may increase the paperwork for those who retired till March 31.