The Central government has issued a crucial clarification regarding gratuity payments following the recent enhancement of the gratuity ceiling. The Department
of Pension and Pensioners’ Welfare (DoPPW) has confirmed that the revised gratuity limit of Rs 25 lakh will apply exclusively to Central government civil servants governed by the Central Civil Services (Pension) Rules, 2021, or the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021, according to a Financial Express report. New Gratuity Ceiling Limited To Central Civil Servants The DoPPW order makes it clear that the enhanced limit will not extend to employees working in public sector undertakings (PSUs), banks, port trusts, the Reserve Bank of India (RBI), autonomous bodies, universities, state governments, or societies. These employees will continue to follow their respective service or pension regulations regarding gratuity entitlements. Role of the Department of Pension and Pensioners’ Welfare The DoPPW functions as the nodal body responsible for developing and implementing pension-related policies for Central government employees. It ensures the timely disbursal of retirement and pensionary benefits and issues periodic updates and clarifications. The department’s objective is to streamline procedures so that retirees and serving officials receive accurate and prompt payments in line with approved rules and regulations. Decision Based on 7th Pay Commission Recommendations The government’s decision to raise the gratuity ceiling was announced through an Office Memorandum dated May 30, 2024. This order increased the maximum limit for retirement and death gratuity by 25 per cent, from Rs 20 lakh to Rs 25 lakh. The revised ceiling took effect from January 1, 2024, aligning with the recommendations of the 7th Pay Commission. The original decision was made on April 30, 2024, but its implementation was briefly paused following a circular issued on May 7. The May 30 clarification formally confirmed the higher ceiling for Central government civil servants.
