Gratuity and Bonus — Amendments

Amendment	Year	Description	Impact
Payment of Gratuity (Amendment) Act, 2018	2018	Increased the maximum limit of gratuity payable to an employee from INR 10 lakhs to INR 20 lakhs. It also empowered the Central Government to notify the period of 'continuous service' for female employees on maternity leave, aligning it with the Maternity Benefit (Amendment) Act, 2017.	Significantly enhanced the financial benefit for employees, especially those with longer service, by doubling the tax-exempt gratuity ceiling. This was a major welfare measure.
Payment of Bonus (Amendment) Act, 2015	2015	Retrospectively increased the eligibility limit for bonus from a salary of INR 10,000 per month to INR 21,000 per month. It also increased the wage calculation ceiling for bonus from INR 3,500 to INR 7,000 per month or the minimum wage for the scheduled employment, whichever is higher.	Expanded the coverage of the Bonus Act to a larger section of employees and increased the quantum of bonus for many, reflecting rising wage levels and inflation. It brought more middle-income workers into the bonus net.
Code on Social Security, 2020	2020	Subsumed the Payment of Gratuity Act, 1972, and the Payment of Bonus Act, 1965, along with seven other labour laws. It introduced a provision for pro-rata gratuity for fixed-term employees, removing the five-year continuous service requirement for them.	Aimed at simplifying and rationalizing labour laws, expanding social security coverage, and providing gratuity benefits to fixed-term workers who were previously often excluded. It represents a move towards a more unified and comprehensive social security system.