New Delhi: The Department of Pension and Pensioners’ Welfare (DoPPW), under the Ministry of Personnel, Public Grievances and Pensions, has issued an important clarification regarding the applicability of the revised gratuity limit for government employees.
In its latest order, the department stated that the maximum gratuity limit of ₹25 lakh will apply only to Central Government civil servants governed by the Central Civil Services (Pension) Rules, 2021 and the Central Civil Services (Payment of Gratuity under the National Pension System) Rules, 2021.
₹25 Lakh Gratuity Limit Not for PSUs, Banks, or State Employees
The clarification was issued after the department received numerous RTI applications and references asking whether the revised gratuity limit would also extend to employees of Public Sector Undertakings (PSUs), Banks, RBI, Port Trusts, Universities, Autonomous Bodies, or State Governments.
The DoPPW has clearly stated that these rules do not apply to such institutions. The order specifies:
“These rules apply only to Central Civil Servants and do not apply to other organizations such as Societies, Banks, Port Trusts, RBI, PSUs, Autonomous Bodies, Universities, and State Governments.”
The department further advised that queries related to these institutions should be directed to the relevant ministry or department handling their service and pension matters.
Central Govt Raised Gratuity Limit in May 2024
Earlier, through a notification issued on May 30, 2024, the Central Government had increased the gratuity limit from ₹20 lakh to ₹25 lakh for central government employees, effective January 1, 2024.
The revision was implemented after the Dearness Allowance (DA) for central employees crossed 50% of basic pay – a benchmark that triggers automatic revision of several allowances and benefits, including gratuity.
Who Benefits from the Change
Only employees working under the Central Civil Services framework are eligible for the enhanced gratuity. Those employed in PSUs, RBI, Port Trusts, Banks, Universities, Autonomous Institutions, and State Governments will continue to receive gratuity as per the rules of their respective organizations.
Employees are advised to contact their HR or pension department for clarity on institution-specific rules and limits.
Ensuring Financial Security for Central Employees
This policy move underscores the government’s commitment to employee welfare and post-retirement financial security. By raising the gratuity ceiling, the government aims to ensure that Central Civil Servants enjoy a stronger financial cushion at the time of retirement.
