Gratuity is a lump sum payment made based on the total service of an employee either on retirement or death. It is calculated as so many months pay with reference to his service.
An employee should have minimum service of 5 years to earn gratuity while for pension he has to put in a minimum service of 10 years. If he resigns for reasons other than to take up another employment in Government, he forfeits his right for gratuity. The maximum gratuity payable is 16 1/2 months emoluments for the maximum of 33 years of service and for lesser service it is proportionately paid as per Pension Rule.45.
If a Government employee dies while in service his family is entitled to the gratuity as follows:-
Qualifying service Rate
1. Less than one year 2 times the emoluments drawn at the time of death
2. One year and above - 6 times the emoluments drawn at the time of death
but less than 5 years
Five years and above
12 times the emoluments drawn at
but less than 20 years of death.
20 years and above 1/2 months emoluments for each
six monthly period subject to a maximum
of 33 monthly periods.
Subject to a ceiling of Rs.1,00,000 from 14.12.1987, Rs.2,50,000 from 01.04.1995 and Rs.3,50,000 from 01.01.1996 Rule 45.(1b) G.O.448 Fin 07.07.1995, 124 Fin 21.02.1995, 138 Fin 25.03.1997, 174 Fin 21.04.1998.
In the case of retirement of a Government employee after 01.10.1979 and after completing 5 years of qualifying service, the amount of retirement gratuity shall be 1/4 of his emoluments for each completed six monthly period of qualifying service subject to a maximum of 16 1/2 times the emoluments subject to maximum of Rs.30,000 upto 31.05.1982, Rs.36,000 upto 30.09.1984 and 50,000 upto 14.12.1987 and 1,00,000 upto 31.03.1985 and Rs.2,50,000 upto 31.12.1995 and Rs.3,50,000 from 01.01.1996 Rule 45(1c) G.O.682 Fin 21.10.1982, 1004 Fin 13.08.1985, 124 Fin 21.02.1995, 138 Fin 25.03.1997, 174 Fin 21.04.1998. In the case of a Government servant who retires on or after 01.04.2003, 50% of the Death-cum-Retirement Gratuity is paid in cash and the balance of 50% in Small Savings Certificate. (G.O 75 Fin Dated 19.03.2003). Subsequently, the Government have directed that the payments of Death-cum-Retirement Gratuity to the State Government employees at the time of retirement shall continue to be made in cash in full even after 01.04.2003. (G.O 218 Fin Dated 27.06.2003). Emoluments include pay, Special pay, Personal pay and Dearness Allowance on date of retirement.
If a Government employee dies within 5 years from the date of retirement from service and become eligible for service gratuity or pension and received gratuity, or pension or commuted pension and such amount received is less than the amount equal to 12 times of his emoluments his family shall be eligible for a residuary gratuity equal to the deficiency. Rule 45(2).
The Government employee has to make a nomination conferring on one or more persons the right to receive the gratuity in accordance with the order of priority on the members of family. The family for purpose of gratuity will be in the order of :
1. Wife, Wives, judicially separated wife or wives
2. Husband, judicially separated husband
3. Sons, step sons, Adopted sons
4. Unmarried Daughters, Step daughters, Adopted daughters
5. Widowed daughters, Step daughters, Adopted daughters
6. Father, Adoptive parents
7. Mother, Step mother, Adoptive parents
8. Brothers, below age of 18 years, step brothers
9. Unmarried sisters, widowed sisters, step sisters
10. Married daughters
11. Children of predeceased son ( Rule 45(5) ).
If the deceased employee was a Divorcee without an issue, the gratuity shall be payable to other members of the family but no family pension will be paid. Letter 135030/86-2 17.11.1987 Only the nominee as per nomination is entitled to receive the gratuity and the person included in the succession certificate is not eligible unless there is a court decree or order with the Government impleaded in the suit. Non members of family mentioned in the succession certificate is not entitled to receive the gratuity. Letter 135030/86-2 Fin 17.11.1987 If there is no nomination, then the order of priority for payment of the gratuity will be (a) items 1 to 4 of Rule 45(5) in equal shares ; (b) If items 1 to 4 are not alive then items 5 to 11 in equal shares.
If the nominee is a minor, then the gratuity shall be paid to the guardian of the minor on production of guardianship certificate. Rule 46(4).
If any surviving member of the Government employee's family who is eligible to receive the gratuity due to the deceased employee has not been heard of by those who would have heard of him/her the share due to such person shall be paid to the surviving parent if such a persons is a minor for being paid as and when he/she is traced. If the person is a major the share shall be paid to items 1 to 4 mentioned in para 6.6 for being paid to him or her as and when the person is traced. If such a person has not been heard of for a period of 7 years, the person shall be deemed to be dead and the family members under items 1 to 4 mentioned in para 6.6. have to share it equally. Rule 46(e).
If a member of family of the deceased Employee who is eligible to receive the gratuity by virtue of Rule 46, is charged with the murder of the employee or abetting of such crime, his claim remains suspended till the conclusion of the criminal case. If he is convicted of the offence, his claim is barred and the amount will be paid to the other eligible members. If he is acquitted of the charge his share will be paid to him Pension Rule 46(A).
Where a Government employee dies while in service or after retirement without receiving the gratuity amount and if has no family or has not made nomination or there is no subsisting nomination, the gratuity due will be lapsed to Government. Rule 47.
If a Government employee has to retire before the gratuity could be finalised, the Accountant General can determine the gratuity to which the employee is entitled and authorise anticipatory gratuity restricted to 80% of such determined amount and in case there is an excess payment found while finalising,, the pensioner has to refund the excess.( Rule 59 ).
If any departmental or judicial proceedings are pending against the employee and he is permitted to retire pending such proceeding, gratuity shall not be paid to him until such proceedings are finalised and order issued. ( Rule 60(1c) ) However if there is any possibility of administrative delay in finalising the proposals, and forwarding them to the Accountant General, the Head of the Department or Head of office has to sanction Provisional Gratuity at 100% of admissible amount to Nongazetted Officials and 80% to Gazetted Officials after deducting the dues. G.O. 467 Fin 25.05.1977.
Gratuity shall not be withheld in respect of a Government employee, who has been permitted to retire pending departmental / judicial proceedings against him, where such proceedings are only for administrative lapses not involving any pecuniary loss to Government (G.O.286 Fin 07.04.1995 Rule 60(1c) and 69(1b).
As per G.O. 1475 Fin 23.11.1973, an interest @ 8% per annum has to be paid to retired person if the gratuity amount remained unpaid for more than 2 months from the date of retirement if the individual was not at fault or disciplinary proceedings are not pending against him. In G.O. 517 Fin 12.06.1987 and 527 Fin 15.06.1987 and 818 Fin 01.12.1988 the interest rate was modified as delay beyond 3 months but upto one year @ 7% per annum and delay beyond one year @ 10 % per annum. In G.O. 122 Fin 20.02.1995 the interest rate was ordered @ 12% compounded annually. The delay in administrative office, A.G.s. Office are covered for payment of interest when the delay could not be attributed to the individual. A.G.s authorisation is not necessary for payment of interest. Head of Office has to claim and pay the interest to the individual after getting orders of Government. In case of arrears of gratuity arising on revision of emoluments interest has to be paid for delays beyond 3 months. In case of compulsory retirement, voluntary retirement, death of employee interest shall be paid for delays beyond six months. Letter 103354 / 87 - 2 Fin 07.09.1987.
In respect of cases instituted, Gratuity is withheld till conclusion of disciplinary proceedings -
a) If a Government servant is exonerated of all the charges and where gratuity is paid on conclusion of such proceedings and payment is made beyond three months from the date of retirement, interest shall be allowed;
b) In cases where the Government servant is not fully exonerated on conclusion of disciplinary proceedings and if the payment is delayed, in such cases interest shall be allowed for the period of delay beyond three months from the date of issue of orders by competent authority following payment of gratuity. (Lr. 31397/Pension/91 Fin 10.05.1991.)
Gratuity cannot be attached by court. ( Section 61 of Civil Procedure Code, G.O.763 Fin 05.04.1994 ) .
Example for Gratuity:
Date of Birth : 20.09.1942.
Date of Commencement of Service 10.04.1965.
Date of retirement : 30.09.2000
Qualifying Service : 30.09.2000-10.04.1965 = 35 years 5 months 20 days.
Non qualifying Service Nil.
Emoluments from 1st July 1999,
Pay Rs. 5875 + Special Pay Rs.50 +Personal Pay Rs.50. From 1st July 2000,
Pay Rs. 6000 + Special Pay Rs. 50 + Personal Pay Rs.50 in the Scale of Rs.4500-125-7000.
Pay last drawn Rs.6100/-.DA @ 41% (as on 1.7.2000) Pay last drawn :Pay + Special Pay + Personal Pay + DA = 6000+50+50+DA 2501 = 8601
Maximum service is restricted to 66 half years.>
Gratuity admissible : 8601 X 66/4 = Rs. 141917.