In India, the Maximum ceiling for payment of Gratuity to Government employee was Rs. 3.5 Lakhs and this was raised to Rs 10 lakhs.
The Gratuity is payable to the retiring Government servant. A minimum of 5 years qualifying service and eligibility to receive service gratuity/pension is essential to get this one time lump sum benefit. Retirement gratuity is calculated @ 1/4th of a month’s Basic Pay plus Dearness Allowance drawn before retirement for each completed six monthly period of qualifying service. There is no minimum limit for the amount of gratuity. The retirement gratuity payable is 16½ times the Basic Pay, subject to a maximum of Rs. 10 lakhs.
This is a one-time lump sum benefit payable to the widow/widower or the nominee of a permanent or a quasi-permanent or a temporary Government servant, including CPF beneficiaries, dying in harness. There is no stipulation in regard to any minimum length of service rendered by the deceased employee.
In the Private establishments, the ceiling is only Rs. 3.5 lakhs and a bill has been introduced in the Parliament to increase the ceiling limit to Rs. 10 lakhs, which will definitely help the working community.