Payment of Gratuity Act
India's New Gratuity Rules: Eligibility Reduced from 5 Years to 1 Year Benefiting Millions of Workers
Nov 24, 2025 04:49 pm CST
India has reduced gratuity eligibility from 5 years to 1 year of service, significantly benefiting fixed-term employees. The reform includes an expanded definition of wages, higher calculation base, and mandatory payment within 30 days. This comprehensive guide explains who benefits, how gratuity is calculated, and the maximum tax-free limit of Rs 20 lakhs.
India Reduces Gratuity Eligibility Period from Five Years to One Year in Major Labour Law Reform
Nov 22, 2025 01:54 pm CST
The Indian government has implemented significant labour law reforms, reducing gratuity eligibility for fixed-term employees from five years to just one year of service. This change is part of a comprehensive overhaul that consolidates 29 existing labour laws into four streamlined codes, aiming to provide equal benefits to fixed-term and permanent employees while modernizing India's workforce regulations to align with global standards.