The government has decided to increase the maximum amount of gratuity payable to its employees, teachers, and staff of autonomous faith by 25%. This is a sigh of relief for approximately 16 lakh employees who will have this great increment impacting their salaries.
There has been an increase of 25 percent in the gratuity limit.
Due to the increase of the dearness allowance rate to 50%, the government has raised the maximum limit of gratuity by 25%. Earlier, the limitation on the gratuity amount was up to Rs. 20,00,000/- but now it has been increased to Rs. 25,00,000/-. By doing this, it will help the employees, especially those in the retirement bracket, to receive a larger gratuity once they retire.
The Pay Committee recommendations of 2018
This increase is as per the States Pay Commission Report 2018 applicable to employees working in the Pradesh government. It was the first time that an official order was released by Neel Ratan Kumar, the Special Secretary of the Finance Department, concerning this change.
Pursuant to the order, they modified the provisions of retirement gratuity and death gratuity under the Central Civil Services (pension) Rules, 1972, so that the maximum ceiling on the amount of gratuity payable to the employee shall not exceed Rs 20 lakh for any reason whatsoever. But seeing that the dearness allowance is up to 50% of the basic pay now, the gratuity limit had to be enhanced to 25%.
Benefits Commencing January 1, 2024
It is the new gratuity limit that welcomes the following benefits, which will be operational on January 1, 2024. According to the order issued under Finance (Pay Commission) Section 1 (KHC/DC/PE-11/Ou/Section 1) dated March 12, 2024, the dearness allowance has been fixed at fifty percent of the basic pay with effect from January 1, 2024.
Therefore, the sum of gratuity given to government employees will be restricted to Rs 25 lakh for those who are now in the retirement process as of this date.
Impact on Employees
Hiking in the stipend limit is likely to reach about sixteen lakhs of state employees, teachers, and staff of autonomous organizations. This decision offers monetary benefits to the retiring people, thereby showing recognition of their yeoman service.
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