By Admin 
Last year, the Department of Pension and Pensioners Welfare (DOPPW) increased the maximum limit of gratuity for central government employees to Rs 25 lakh. This change came into effect from January 1, 2024, when dearness allowance (DA) reached 50 percent. However, it is not necessary that every government employee gets this full amount.
How is the calculation of gratuity?
The calculation of gratuity is done on the basis of a particular formula. According to the rule, the employee gets 16.5 times or 25 lakh rupees of his last salary (basic pay + dearness allowance), whatever is low, in the form of gratuity. This means that not every employee will get 25 lakh rupees, but gratuity will be fixed on the basis of their service period and salary.
Gratuity types
Government employees get two types of gratuity – retirement gratuity and death gratuity.
Retirement gratuity
A quarter of basic pay + dearness allowance is added for every 6 months of service.
A maximum of 16.5 times salary or 25 lakh rupees, whichever is less, will be given.
At least 5 years of service is mandatory to get gratuity.
Decath gratuity
If the employee dies during service, then his family will get gratuity according to this formula-
Service less than 1 year: 2 times the salary
1 to 5 years: 6 times the salary
5 to 11 years: 12 times the salary
11 to 20 years: 20 times the salary
More than 20 years: half salary for every 6 months
Will there be gratuity under Unified Pension Scheme (UPS)?
The central government is going to launch a new pension scheme, ‘Unified Pension Scheme (UPS)’ from April 1, 2025. The scheme combines the characteristics of Old Pension Scheme (OPS) and National Pension System (NPS). In this, a minimum pension of Rs 10,000 will be given to employees with at least 10 years and a fixed pension will be given to those who complete the entire service period.
Recently, the government was asked in Parliament whether gratuity would be received under Unified Pension Scheme (UPS), as is found in Old Pension Scheme (OPS) and New Pension Scheme (NPS). The Finance Ministry replied that there is an option under UPS, NPS, and “Gratuity will be given as per Central Civil Services (Payment of Gratuity under the National Pension System) Rules, 2021.”
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