Gratuity limit hiked: Govt has increased the maximum gratuity limit from Rs 20 lakh to Rs 25 lakh

The increased limit of Death cum Retirement Gratuity (DCRG) will benefit those BSNL and MTNL employees whose pension comes under Rule 37 of CCS (Pension) Rules, 2021. The new limit will be applicable on gratuity payments made after January 1, 2024.

The government has increased the maximum gratuity limit from Rs 20 lakh to Rs 25 lakh for BSNL and MTNL employees opting for pension under joint service. The increased gratuity limit will be applicable from January 1, 2024. This change will be applicable from January 1, 2024 and has been made due to the 50% increase in Dearness Allowance (DA).

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Gratuity limit increased from Rs 20 lakh to Rs 25 lakh

The Department of Pension and Pensioners’ Welfare (DoPPW) had issued a notification on May 30, after the DA (Dearness Allowance) reached 50% of the basic salary, raising the gratuity limit for central government employees from Rs 20 lakh to Rs 25 lakh. This increase in the gratuity limit will be effective from January 1, 2024.

According to the rules, all allowances are revised by 25% when DA reaches 50% of the basic salary for central government employees. According to these rules, the Center announced an increase in several allowances as well as changes in the retirement gratuity limit.

Department of Telecommunications, Ministry of Communications has increased the gratuity maximum limit from Rs 20 lakh to Rs 25 lakh for BSNL/MTNL employees who have opted for joint service pension and whose pension is covered under Rule 37 of CCS (Pension) Rules, 2021.

The Department of Telecommunications said in a memorandum, "The payment rates of
 Death-Cum-Retirement-Gratuity (DCRG) will be revised as per Para-3 of DoP&PW OM 
No.28/03/2024-P&PW(B)/Gratuity/9559 dated 30.05.2024. The maximum limit of Death
 Cum Retirement Gratuity will be Rs 25 lakh from 01.01.2024."
Let us understand in an easy way what this means for pensioners

Gratuity limit hiked

The increased limit of Death cum Retirement Gratuity (DCRG) will benefit those BSNL and MTNL employees whose pension comes under Rule 37 of CCS (Pension) Rules, 2021. The new limit will be applicable on gratuity payments made after January 1, 2024.

No change in pension calculation

There has been no change in the existing formula used for calculating pension or family pension. That is, employees and pensioners will continue to receive their pension according to the already established method.

No change in commutation provision

Commutation provisions for pension will remain the same, ensuring that there will be no change in the commutation value or calculation.

On which employees’ pension this change will be applicable

This change will directly affect those employees of BSNL/MTNL who have opted for pension based on their combined service. This is an adjustment made due to the increase in DA level. The new change has brought financial relief to pensioners in view of rising inflation. This step reflects the government’s commitment to the betterment of the employees.

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