Archive · 27 Jan 2026
Centre issues detailed gratuity guidelines for CPSE employees
The government has released new rules about gratuity, which is a type of retirement benefit, for employees of Central Public Sector Enterprises (CPSEs).
These rules were issued on December 9, 2025, and they explain how much money employees can get when they retire.
The rules say that from March 29, 2018, all CPSEs must pay a maximum of Rs 20 lakh as gratuity, no matter their financial situation.
Before this date, the amount depended on how much each CPSE could afford.
The rules also clarify that the higher gratuity limit announced by the 7th Pay Commission does not apply to CPSE employees.
All ministries and CPSEs have been asked to follow these new guidelines.
The Centre issued consolidated guidelines on gratuity payment for CPSE employees on December 9, 2025.
The gratuity ceiling was raised to Rs 20 lakh from March 29, 2018, applicable to all CPSEs.
Before March 29, 2018, gratuity payments were subject to the affordability of individual CPSEs.
The 7th Pay Commission's gratuity benefit is not applicable to CPSE employees.
All administrative ministries and departments must ensure compliance with the new guidelines.
- Who
- Employees of Central Public Sector Enterprises (CPSEs)
- What
- Consolidated guidelines on gratuity payment
- When
- Issued on December 9, 2025, effective from March 29, 2018
- Where
- Applicable to all CPSEs in India
- Why
- To bring clarity on eligibility, timelines, and the applicability of the Rs 20 lakh gratuity ceiling
- Issuing Authority
- Ministry of Finance’s Department of Public Enterprises (DPE)
- Date of Issue
- December 9, 2025
- Applicability
- All Central Public Sector Enterprises (CPSEs)
- Gratuity Ceiling
- Rs 20 lakh
- Effective Date for New Ceiling
- March 29, 2018
- Period for Affordability-Based Gratuity
- January 1, 2017 to March 28, 2018
- 7th Pay Commission Benefit Applicability
- Not applicable to CPSE employees