look news india
This news is a big blow to the 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 of employees. Let us tell you here that EPFO had said in an order issued last month that the maximum limit of retirement gratuity and death gratuity has been increased by 25 percent. Which has increased from Rs 20 lakh to Rs 25 lakh. This decision has been taken due to 50 percent increase in dearness allowance 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). However, no reason was given for this decision in the order.
Announcement of 4 percent increase in dearness allowance
It is known that the Central Government has announced a 4 percent increase in Dearness Allowance (DA) and Dearness Relief (DR) in March 2024. After this increase, the employees' allowance became 50 percent of the basic salary. Along with increasing the allowance by 50 percent, many types of allowances of central government employees were also increased. Let us tell you here that whenever dearness allowance increases, rent allowance (HRA) also increases. However, HRA increases according to the category of cities. The government has also increased the HRA of X, Y, Z category employees. After DA became 50 percent, the limit of gratuity 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 hostel subsidy was also increased by 25 percent.
what is gratuity
Gratuity is a scheme under which a company gives a fixed amount to its employees. For this, it is necessary that the employees have served the company for at least 5 years or more. According to the Payment of Gratuity Act, 1972, this gratuity is given to employees when they resign or retire.