Gratuity Calculation Formula/Gratuity Payment Rules 2022 for Central Government Employees: The maximum retirement or death gratuity payable to a retired or deceased Central Government Employee is Rs 20 lakh.
Gratuity Calculation Formula/Gratuity Payment 2022 for Central Government Employees: The maximum retirement or death gratuity payable to a retired or deceased Central Government Employee is Rs 20 lakh. According to “Pension Rules 2021” released by the Department of Pension and Pensioners’ Welfare (DoPPW), retirement gratuity equal to one-fourth of emoluments for each completed six monthly periods of qualifying service can be paid to a Government servant, who has completed five years’ qualifying service and has become eligible for service gratuity or pension under Rule 44.
Read More:-Govt cuts windfall tax on diesel, ATF export; raises levy on domestic crude oil
The gratuity amount is subject to a maximum of 16½ times the emoluments.
A Government servant, who has completed five years’ qualifying service and has become eligible for service gratuity or pension under Rule 44 shall, on his retirement, be granted retirement gratuity equal to one-fourth of his emoluments for each completed six monthly period of qualifying service, subject to a maximum of 16½ times the emoluments,” Pension Rules 2021 says.
Death gratuity is paid to the family in case a Government servant dies while in service. The rate for payment of death gratuity is following:
Read More:-Filed ITR FY 2021-222? Here are 5 income tax rules on ITR refund you MUST know
Death Gratuity
- If the lenght of qualifying service is less than one year: Gratuity to be paid is 2 times of emoluments
- If the lenght of qualifying service is one year or more but less than 5 years: Gratuity to be paid is 6 times of emoluments
- If the lenght of qualifying service is 5 years or more but less than 11 years, : Gratuity to be paid is 12 times of emoluments
- If the length of qualifying service is 11 years or more but less than 20 years: Gratuity to be paid is 20 times of emoluments.
- If the length of qualifying service is 20 years or more: Gratuity to be paid is half of emolouments for every completed six-monthly period of qualifying service subject to a maximum of 33 times or emoluments.
The above death gratuity rates are also applicable in case of the death of a Government servant by suicide.
Read More:-Uber sells 7.8% stake in India’s Zomato for $392 million: Sources
If a government retired government servant dies within 5 years from the date of retirement and without receiving an amount equal to or 12 times of his emoluments are gratuity or pension, then a residuary gratuity equal to the deficiency may be granted to his family, according to Pension Rules 2021.
Qualifying service
For calculating the length of qualifying service, a fraction of a year equal to three months and above is treated as a completed six monthly period and reckoned as qualifying service.
If an employee has served for 4 years nine months or more but less than 5 years, then his/her qualifying service for calculation of gratuity will be taken as 5 years. And s/he will be eligible for retirement gratuity.
Dearness Allowance
According to the Pension Rules 2021, dearness allowance admissible on the date of retirement or death shall also be treated as emoluments for the purpose of calculation of gratuity.
