Rs. 25 Lakh Gratuity Limit Won’t Apply To Employees Of PSUs, State-Owned Banks

In the order, the Department of Pension and Pensioners’ Welfare (DoPPW) clarified that the revised limit did not apply to employees of public sector undertakings (PSUs), banks, port trusts, the Reserve Bank of India (RBI), autonomous bodies, universities, state governments, or societies.

The DoPPW stated, “These rules do not apply to the types of organisations [listed in the order]." It is further stated that any query on the subject should be addressed to the organisation concerned or the respective Ministry/Department. 

The clarification was issued after the Department kept receiving “references/RTI applications, etc.” on whether the "payment of gratuity under CCS (Pension) Rules” applied to societies, banks, port trusts, the RBI, PSUs, autonomous bodies, universities, and State governments; and, if not, under which rules these organisations were governed.

Pensions, Retirement Benefits

The DoPPW is an entity under the Government of India responsible for formulating policies and providing guidance on matters related to pensions, retirement benefits, and other welfare measures for Central government employees.

It oversees the implementation of pension rules, gratuity payments, and related schemes, ensuring that retirees and serving civil servants receive their entitlements on time. The department also issues clarifications, updates, and notifications regarding changes in pension laws, rules, and benefits.

Revised Gratuity Limit

The retirement and death gratuity limit was increased by 25 per cent, raising the limit from Rs. 20 lakh to Rs. 25 lakh. The new gratuity limit was effective from January 1, 2024.

An Office Memorandum had announced this decision, following recommendations of the 7th Pay Commission. The maximum limit for retirement and death gratuity under the CCS (Pension) Rules or the CCS (Payment of Gratuity under National Pension System) Rules, 2021, is now Rs. 25 lakh.

The decision was originally made on April 30, but it was stayed by a circular on May 7.