The government has raised the income tax exemption limit on gratuity from 3.5 lakh rupees to 10 lakh rupees with effect from May 24. According to a release issued by Finance Ministry in New Delhi today, employees who retire, become incapacitated, terminated, or die on or after May 24, 2010, will get I-T exemption for gratuity up to 10 lakh rupees. It said that the Finance Ministry today notified a rule in this regard. Earlier, the Parliament had approved raising the limit of gratuity to be exempted from income tax. The Payment of Gratuity (Amendment) Bill, 2010, was passed by the Parliament in this regard in the Budget session.While the Sixth Pay Commission had raised the limit for Central Government employees, the Cabinet later enhanced the ceiling for the private sector workforce as well.