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Govt. Clarifies Gratuity Rules: Are You Covered by the Rs. 25 Lakh Limit?

Govt. Clarifies Gratuity Rules: Are You Covered by the Rs. 25 Lakh Limit?

Govt. Clarifies Gratuity Rules: Are You Covered by the Rs. 25 Lakh Limit?

The Department of Pension & Pensioners' Welfare (DoPPW) has issued an Office Memorandum, dated October 24, 2025, to provide an important clarification regarding the payment of gratuity to Central Government servants. This new memorandum addresses ongoing confusion about which employees are eligible for the enhanced gratuity limit.

The Background: Gratuity Limit Increased

Earlier, the DoPPW had issued an O.M. (No. 28/03/2024-P&PW(B)/Gratuity/9559) on May 30, 2024. This order enhanced the maximum limit of gratuity from Rs. 20 lakhs to Rs. 25 lakhs.

This enhancement was specifically for central government civilian employees who are covered under:

  • The Central Civil Services (Pension) Rules, 2021.
  • The Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.

Widespread Confusion

Following the 2024 order, the DoPPW reported that it kept receiving references and RTI applications seeking clarification. Many people wanted to know if this enhanced gratuity limit and the associated CCS (Pension) Rules were also applicable to a wider range of organizations.

The organizations in question included:

  • Societies
  • Banks
  • Ports trusts
  • RBI (Reserve Bank of India)
  • PSUs (Public Sector Undertakings)
  • Autonomous bodies
  • Universities
  • State Governments

The Official Clarification

The new Office Memorandum provides a clear answer.

It states that the Department of Pension & Pensioners' Welfare (DoPPW) is the nodal department for policies on pension and retirement benefits only for Central Government civil employees covered by the two 2021 rules mentioned above.

The O.M. explicitly clarifies that these rules "are not applicable on types of organisations as mentioned in para 2 above".

Where to Find the Correct Information

For employees of organizations like banks, PSUs, universities, or state governments, the DoPPW advises that any queries on the subject must be handled differently.

Any questions, including which rules govern these other organizations, "should be addressed to the concerned organisation/concerned administrative Ministry/Department".

The government has requested that the contents of this Office Memorandum be given wide publicity and brought to the notice of all concerned parties. This directive was issued with the approval of the competent authority.

Download Official Memorandum (PDF)

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