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The Rs 25 lakh gratuity cap applies only to central government civil servants, not to PSU, bank, or RBI employees, officials clarified.
Centre clears confusion on gratuity cap.
The central government has issued a key clarification on gratuity payments. In a recent order, the Department of Pension and Pensioners’ Welfare (DoPPW) stated that the revised gratuity ceiling of Rs 25 lakh will apply only to central government civil servants covered under the Central Civil Services (Pension) Rules, 2021, or the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021, according to Financial Express report.
This means the enhanced limit will 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 Department of Pension and Pensioners’ Welfare (DoPPW) is the central government body 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 accurately and on time. The department also issues clarifications, updates, and notifications regarding changes in pension laws, rules, and benefits.
The government had decided to raise the gratuity limit in May. The retirement and death gratuity limit has been increased by 25 per cent. This raises the limit from Rs 20 lakh to Rs 25 lakh. The new gratuity limit became effective from January 1, 2024.
An Office Memorandum dated May 30, 2024, announced this decision. This follows the recommendations of the 7th Pay Commission. The maximum limit for retirement and death gratuity under the Central Civil Services (Pension) Rules, 2021, or the Central Civil Services (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 The decision was originally made on April 30, but it was stayed by a circular on May 7.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
October 26, 2025, 10:00 IST
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