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The 8th Central Pay Commission (8th CPC) has received a proposal seeking major changes to retirement gratuity for Central Government employees. The NC-JCM Staff Side has demanded that the maximum gratuity ceiling be increased from ₹25 lakh to ₹75 lakh, along with revisions to the existing calculation rules.
The demands were included in its memorandum dated 14 April 2026. Another employee organisation, the Indian Railways Technical Supervisors’ Association (IRTSA), has separately proposed a ₹50 lakh ceiling.
Both proposals remain under consideration. Neither amount has been approved by the Government.
What is the current gratuity limit for Central Government employees?
Under the applicable Central Civil Services pension rules, the maximum Retirement Gratuity and Death Gratuity is currently ₹25 lakh.
This ceiling was increased from ₹20 lakh following the rise in Dearness Allowance (DA) to 50%, with effect from 1 January 2024.
Retirement gratuity is calculated using the employee’s qualifying service and emoluments, generally comprising Basic Pay and DA.
The existing calculation is:
Retirement Gratuity = (Basic Pay + DA) × ¼ × Completed Six-Monthly Periods of Qualifying Service
The amount is subject to a maximum of 16.5 times the relevant emoluments and the monetary ceiling of ₹25 lakh.
What changes has NC-JCM proposed under the 8th CPC?
The NC-JCM Staff Side wants the Commission to reconsider three aspects of gratuity:
- Higher gratuity ceiling: Increase the maximum amount from ₹25 lakh to ₹75 lakh.
- Revised calculation: Calculate gratuity at half a month’s Basic Pay plus DA for each completed six-month period of qualifying service.
- Removal of service-linked restriction: Eliminate the present ceiling of 16.5 times the employee’s emoluments.
The organisation has also proposed using 25 effective working days instead of 30 days as a calculation basis, arguing that Central Government employees should receive more equitable treatment.
The 25-day proposal is a separate suggested change and should not be confused with the current CCS gratuity formula.
NC-JCM has further requested that the revised benefits extend to eligible employees under OPS, NPS and UPS.
How much difference could the proposed gratuity formula make?
Consider an employee retiring after 33 years of qualifying service with monthly Basic Pay and DA totalling ₹1,00,000.
Particulars | Current formula | NC-JCM proposed formula |
Basic Pay + DA | ₹1,00,000 | ₹1,00,000 |
Qualifying service | 33 years | 33 years |
Completed six-month periods | 66 | 66 |
Calculation per period | ¼ month | ½ month |
Calculated gratuity | ₹16.50 lakh | ₹33 lakh |
Under this illustration, the proposed half-month formula would double the calculated gratuity.
However, this example applies only the proposed half-month calculation, without incorporating the separate 25-working-day suggestion.
The actual amount would depend on the final rules, qualifying service, emoluments and applicable monetary limits.
A ₹75 lakh ceiling would not mean every retiring employee automatically receives ₹75 lakh.
IRTSA proposes a different gratuity structure
The Indian Railways Technical Supervisors’ Association has also submitted recommendations to the 8th CPC.
Its proposal includes:
- Retirement gratuity calculated at one-third of monthly Basic Pay plus DA for every completed six-month period.
- A proposed gratuity level of 32 times Basic Pay plus DA for employees with 33 years or more qualifying service.
- A maximum monetary ceiling of ₹50 lakh.
The one-third formula and the separate 32-times proposal require clarification on how they would operate together.
The differences between the organisations can be summarised as follows:
Particulars | NC-JCM | IRTSA |
Proposed maximum ceiling | ₹75 lakh | ₹50 lakh |
Proposed six-monthly calculation rate | ½ month | ⅓ month |
Additional proposal | Remove 16.5-times ceiling | 32-times emoluments for 33+ years |
These are independent recommendations from employee organisations, not competing government-approved gratuity schemes.
Has the Government approved the revised gratuity ceiling?
As of 22 October 2026, the official maximum remains ₹25 lakh under the applicable rules.
The 8th CPC has not announced an accepted ₹75 lakh or ₹50 lakh gratuity ceiling, nor has the Government notified the proposed calculation changes.
For employees approaching retirement, the important issue is not merely the maximum amount demanded. Changes to the calculation rate and service-linked ceiling could also substantially affect retirement benefits.
Any revision will depend on the Pay Commission’s recommendations and subsequent Government approval and notification.
Sources
1. Press Information Bureau — Enhancement of Gratuity Ceiling to ₹25 Lakh
Read the official Government announcement
2. NC-JCM Staff Side — Retirement Benefits Memorandum, 14 April 2026
Read the NC-JCM gratuity proposals
3. IRTSA — Memorandum to the 8th Central Pay Commission
Read the IRTSA memorandum (PDF)
4. 8th Central Pay Commission — Official Website
Disclaimer: The gratuity figures of ₹75 lakh and ₹50 lakh are proposals submitted by employee organisations. They are not sanctioned government benefits. Individual retirement gratuity is subject to applicable rules and qualifying conditions.
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