The Department of Public Enterprises (DPE) has released the Consolidated Guidelines regarding the payment of Gratuity to employees of Central Public Sector Enterprises (CPSEs). This master circular unifies all previous orders into a single document, clarifying the calculation formula, the definition of Continuous Service, and the mandatory tax-free ceiling for executives and non-unionised supervisors.
- Status: Consolidated Guidelines Issued
- Authority: Department of Public Enterprises (DPE)
- Applicability: All CPSE Employees (Executives & Non-Executives)
- Key Impact: Standardization of Gratuity Limits & Forfeiture Rules
What Changed: DPE Master Circular
The DPE has released a comprehensive compendium that supersedes disjointed circulars from previous years. This Single Source order confirms that CPSE employees are strictly governed by the Payment of Gratuity Act, 1972. It reinforces that the enhanced ceiling of ₹20 Lakh, effective from March 29, 2018, is the absolute upper limit for tax exemption, unless a specific company scheme offering higher benefits is verified by the Ministry.
✅ Official Protocol Confirmed
Authority: Department of Public Enterprises (DPE)
Subject: Consolidated Guidelines on Payment of Gratuity in CPSEs
The New Protocol: Eligibility & Calculation
Under the consolidated rules, the 5-Year Continuous Service rule remains the primary requirement. However, the guidelines clarify exceptions where the 5-year condition is waived.
✔ Eligible for Payment
- Superannuation: Retirement at age 60.
- Resignation: After completing 5 continuous years.
- Death/Disablement: No minimum service required.
✖ Forfeiture Conditions
- Moral Turpitude: Termination due to riotous or disorderly conduct.
- Damage to Property: Gratuity can be withheld to the extent of the loss caused.
Calculation Logic: 15/26 Rule
For CPSE employees, Gratuity is calculated on the last drawn salary, which includes Basic Pay and Dearness Allowance. The month is reckoned as 26 days rather than 30.
| Component | Formula/Value | Remarks |
|---|---|---|
| Wage Basis | Last Basic Pay + DA | HRA and other allowances excluded |
| Rate | 15 Days per completed year | The 15 divided by 26 factor is used |
| Service Rounding | Over 6 Months = 1 Year | 10 Years 7 Months becomes 11 Years |
| Max Ceiling | ₹20,00,000 | Tax-free under Income Tax Act |
CPSE Gratuity Calculator (Illustrative)
See how your final payout is determined using the DPE standard formula.
Calculation: 90,000 × 0.5769 × 20
Total Gratuity: ₹10,38,461
Note: If the result exceeds ₹20 Lakh, payment is restricted to ₹20 Lakh unless exempted.
How to Respond (Draft Application)
If your CPSE has delayed Gratuity or miscalculated the service years, submit this formal representation citing the Gratuity Act.
“To,
The Competent Authority,
[CPSE Name, e.g., BHEL/ONGC],
[Unit/Office Address]Subject: Application for Payment of Gratuity under Consolidated DPE Guidelines.
Respected Sir/Madam,
I, [Name], retired/resigned from the post of [Designation] on [Date] after rendering [Years] of continuous service. As per the DPE Consolidated Guidelines and the Payment of Gratuity Act, 1972, I am eligible for gratuity calculated at the rate of 15 days’ wages for every completed year of service.
Kindly process my payment of ₹[Amount] calculated on my last drawn Basic and DA of ₹[Amount]. My bank details are attached.
Sincerely,
[Your Name]
[Employee No]”
हिंदी सारांश: सीपीएसई ग्रेच्युटी नियम 2026
लोक उद्यम विभाग ने सीपीएसई कर्मचारियों के लिए ग्रेच्युटी भुगतान पर समेकित दिशा-निर्देश जारी किए हैं। इसके तहत, 5 साल की निरंतर सेवा पूरी करने वाले कर्मचारी ग्रेच्युटी के हकदार हैं। गणना के लिए अंतिम वेतन और महंगाई भत्ते को 15/26 के गुणक और सेवा वर्षों से गुणा किया जाता है। अधिकतम कर-मुक्त सीमा ₹20 लाख निर्धारित की गई है। यदि अनुशासनात्मक कार्यवाही के तहत नौकरी से निकाला गया है, तो ग्रेच्युटी जब्त की जा सकती है।
Frequently Asked Questions
Is the Gratuity limit increased for CPSE employees in 2026?
The current tax-free Gratuity ceiling for CPSE employees stands at ₹20 Lakh, effective from March 29, 2018. While demands for a hike to ₹25 Lakh exist, the DPE consolidated guidelines maintain the ₹20 Lakh cap strictly until further notification.
Is 5 years of service mandatory for Gratuity in CPSE?
Yes, completing 5 years of continuous service is mandatory for resignation or retirement cases. However, this condition is waived if the service termination is due to death or disablement, in which case the nominee receives the amount regardless of tenure.
Can a CPSE withhold Gratuity for outstanding dues?
Yes, under the DPE guidelines and the Gratuity Act, a CPSE can deduct amounts equivalent to official dues such as House Building Advance or Quarter Rent from the Gratuity payout. Full forfeiture is allowed only in cases involving moral turpitude or riotous conduct.