Good News for Defence Personnel! Government recommended increasing the gratuity limit to ₹25 lakhs after the dearness allowance rises to 50% of the Basic Pay
Ministry of Defence has issued an office memorandum announcing an increase in the maximum limit of gratuity for Defence Personnel, following the recent rise in Dearness Allowance (DA) to 50% of basic pay under the 7th Central Pay Commission.
As per the new order issued by the Department of Ex-Servicemen Welfare vide memo no: F.No.17(2)/2016-D(P/P)-Vol-1 dated 19th May 2025, this ceiling on gratuity shall be increased by 25% whenever the Dearness Allowance rises by 50% of the basic pay.
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The Department of Expenditure had earlier confirmed the DA hike from 46% to 50% through its order dated 12th March 2024. Accordingly, as per the Government’s decisions in implementation of the recommendation of the Seventh CPC, the maximum limit of all kinds of gratuity is increased by 25% i.e from Rs 20.00 Lakh to Rs 25.00 Lakh, with effect from 01.01.2024.
The maximum limit is revised for all kinds of Gratuity i.e. Retiring/ Retirement/ Service/ Invalid/ Special/ Terminal/ Death Gratuity for Commissioned Officers, Junior Commissioned Officers, and Other Ranks retiring or dying in harness on or after 1st January 2016.
The decision was received with the concurrence from the Finance Division of the Ministry of Defence and shows the government’s continued commitment to implement the 7th CPC recommendations within due time. A large number of Central Government employees will get benefits from this.
