Gratuity Limit Increased by 25% to Rs 25 Lakh

The Employees’ Provident Fund Organisation (EPFO) has announced an increase in the maximum limit for retirement and death gratuity for Central Government employees. As per the latest circular issued by the Ministry of Labour and Employment, the maximum gratuity amount has been raised to Rs. 25 lakh, effective January 1, 2024.

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This revision comes in line with the increase in Dearness Allowance (DA) payable to Central Government employees to 50% of the basic pay. The previous maximum gratuity limit was Rs. 20 lakh.

The circular, issued by the Additional Central PF Commissioner (HR), states that this enhancement is subject to other conditions mentioned in the Department of Pension and Pensioners’ Welfare (DoP&PW) Office Memorandum dated August 4, 2016.

The increase in the gratuity limit will provide additional financial security to Central Government employees upon retirement or in the event of their demise. Gratuity is a lump-sum payment made to employees as a benefit for their service, and it forms an important component of retirement planning.