The central government has announced another benefit for its employees. Following a 4% increase in the Dearness Allowance (DA), the government has decided to raise the gratuity limit by 25%, from ₹20 lakh to ₹25 lakh, effective January 1, 2024.
This decision was detailed in an Office Memorandum dated May 30, 2024, based on the 7th Pay Commission's recommendations.
The new gratuity limits apply under the Central Civil Services (Pension) Rules, 2021, and the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.
Gratuity is a benefit given to long-serving employees, in addition to salary, pension, and Provident Fund (PF). To be eligible, an employee must have worked for at least five years.
Earlier, on March 7, the Union Cabinet approved an additional instalment of DA for Central government employees and Dearness Relief (DR) for pensioners.
This 4% increase, raising the rate to 46% of the Basic Pay/Pension, aims to offset the rise in prices.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief stands at ₹12,868 crore per annum.
With the increase in DA, transport allowance, canteen allowance, and deputation allowance among others, were also increased by 25%.
Likewise, the house rent allowance (HRA) was raised from 27%, 19% and 9% of basic pay to 30%, 20% and 10%, respectively.
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This decision was detailed in an Office Memorandum dated May 30, 2024, based on the 7th Pay Commission's recommendations.
The new gratuity limits apply under the Central Civil Services (Pension) Rules, 2021, and the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.
Gratuity is a benefit given to long-serving employees, in addition to salary, pension, and Provident Fund (PF). To be eligible, an employee must have worked for at least five years.
Earlier, on March 7, the Union Cabinet approved an additional instalment of DA for Central government employees and Dearness Relief (DR) for pensioners.
This 4% increase, raising the rate to 46% of the Basic Pay/Pension, aims to offset the rise in prices.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief stands at ₹12,868 crore per annum.
With the increase in DA, transport allowance, canteen allowance, and deputation allowance among others, were also increased by 25%.
Likewise, the house rent allowance (HRA) was raised from 27%, 19% and 9% of basic pay to 30%, 20% and 10%, respectively.
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