Gratuity is a bulk amount paid by the employer to his/her employee
for his/her service at the time of retirement under the Gratuity Act 1972 .
Pay Commission Gratuity
Death, Retirement and Service Gratuity for CG Employees
is Gratuity in Central Government Services?
Gratuity is a hidden savings of employees working in Government
Service. Gratuity amount is calculated depends upon his period of service. The
bulk amount of Gratuity is usually paid at the time of retirement. In some
cases, it can be paid before as per existing rules.
How to calculate Gratuity?
Calculation of Gratuity = [ (Basic Pay + Dearness Allowance) x 15
days x Number of Years of Service ] / 26 Days.
calculating taken 26 Days instead of 31?
As per the labour law in India, the maximum working days in a month
should be 26. Weekly holiday should be given to employees is compulsory.
is the ceiling of Gratuity?
The 7th pay commission recommended to enhance the ceiling of
Gratuity from Rs. 10 lakh to 20 lakh.
There are three types of Gratuity in force in Government services…
DEATH GRATUITY &
This is payable to the retiring Government servant. A minimum of 5
years’ qualifying service and eligibility to receive service gratuity / pension
is essential to get this one time lump sum benefit. Retirement gratuity is
calculated @ 1/4th of a months Basic Pay plus Dearness Allowance drawn on the
date of retirement for each completed six monthly period of qualifying service.
There is no minimum limit for the amount of gratuity. The
retirement gratuity payable for qualifying service of 33 years or more is 16
times the Basic Pay plus DA, subject to a maximum of Rs. 20 lakhs.
This is a one-time lump sum benefit payable to the nominee or
family member of a Government servant dying in harness. There is no stipulation
in regard to any minimum length of service rendered by the deceased employee.
Entitlement of death gratuity is regulated as under:
Less than one year
2 times of basic pay
One year or more but less than 5 years
6 times of basic pay
5 years or more but less than 11 years
12 times of basic pay
Maximum amount of Death Gratuity admissible is Rs. 20 lakhs w.e.f. 1.1.2016
A retiring Government servant will be entitled to receive service gratuity (and not pension) if total qualifying service is less than 10 years.
Admissible amount is half months basic pay last drawn plus DA for each completed 6 monthly period of qualifying service. This one time lump sum payment is distinct from retirement gratuity and is paid over and above the retirement gratuity.