7th Pay Commission: The central government increased the Dearness Allowance given to central employees in March. Now the dearness allowance of employees has increased from 46 percent to 50 percent. Along with the Dearness Allowance (DA Hike), the Gratuity Hike limit of the employees has also increased. Although EPFO has given a big statement in this matter
This has been a major shock for employees working in government and organized sectors. The Employees’ Provident Fund Organization (EPFO) has put a stop to the increase in retirement and death gratuity for employees. Let us tell you that in an order issued last month, EPFO had said that the maximum limit of retirement gratuity and death gratuity has been increased by 25 percent. It has increased from 20 lakh to 25 lakh. This increase was due to 50 percent increase in Dearness Allowance (DA) of central government employees.
On May 7, the Employees’ Provident Fund Organization (EPFO) had announced to stop the increase in gratuity with immediate effect due to the increase in Dearness Allowance (DA). No reason was given for this decision in the order.
Announcement of 4 percent increase in dearness allowance
In fact, the Central Government had increased Dearness Allowance (DA) and Dearness Relief (DR) by 4 percent in March 2024. After this increase, the employees’ allowance became 50 percent of the basic salary. Along with the allowance being increased to 50 percent, various types of allowances of the Central Government employees have also increased. Let us tell you that whenever there is an increase in dearness allowance, the rent allowance (HRA) also increases along with it. However, HRA is increased according to the category of cities. The government has also increased the HRA of employees falling in the X, Y Z categories of cities. After DA was increased by 50 per cent, the gratuity limit was also increased from Rs 20 lakh to Rs 25 lakh. Due to increase in dearness allowance, the limit of children’s education allowance and host subsidy also increased by 25 percent.
What is gratuity
Gratuity is the scheme under which the company gives to its employees. For this, it is necessary that the employee should serve the company for at least 5 years or more. According to the Payment of Gratuity Act, 1972, this gratuity will be given to the employees when they retire or resign.
