New Gratuity Payment Guidelines for Central Civil Employees in 2025

Clarification on Gratuity Payments

The central government has issued an important clarification regarding gratuity payments. Under the Ministry of Personnel, Public Grievances and Pensions, the Department of Pension and Pensioners' Welfare (DoPPW) has stated that the maximum gratuity amount of ₹25 lakh will only be available to central government civil employees who fall under the Central Civil Service (Pension) Rules, 2021 or the Central Civil Service (Gratuity Payment under the National Pension System) Rules, 2021.

Exclusions from the New Rules

This means that the increased gratuity limit will not apply to all institutions or employees. Specifically, employees from public sector undertakings (PSUs), banks, port trusts, the Reserve Bank of India (RBI), autonomous bodies, universities, state governments, or societies will not benefit from this enhanced limit. The pension department noted that it has received numerous RTI applications and inquiries asking whether the ₹25 lakh gratuity limit applies to banks, PSUs, RBI, port trusts, universities, autonomous institutions, and state governments.

Official Statement from the Department

The department has clearly stated, 'These rules apply only to central civil servants and do not extend to other organizations such as societies, banks, port trusts, RBI, PSUs, autonomous bodies, universities, and state governments.' It also advised that for any queries or information regarding rules related to these institutions, one should contact the respective ministry or department.

Increase in Gratuity Limit by the Central Government

On May 30, 2024, the central government announced an increase in the gratuity limit for central employees from ₹20 lakh to ₹25 lakh. This change is effective from January 1, 2024. The increase coincided with the dearness allowance (DA) reaching 50% of the basic salary for central employees. According to regulations, whenever the DA hits 50%, all allowances are raised by 25%. Consequently, the government also raised the retirement gratuity limit.