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DA hiked to 50% for central government employees; retirement and death gratuity will increase by this much
Latest on DA hike: The Central government increased the dearness allowance (DA) and dearness relief (DR) by 4% in March 2024. This hike in DA to 50% also increased various components of a central government employee’s salary.The Central government increased the dearness allowance (DA) and dearness relief (DR) by 4% in March 2024. This was a major relief for millions of central government employees and pensioners.
Due to this hike in DA to 50%, various components of a central government employee’s salary also increased.
For instance, the government also hiked the rent allowance (HRA) for central government employees living in cities in the X, Y, and Z categories.
Additionally, the Centre has raised the tax exemption ceiling on gratuities for central government employees from Rs 20 lakh to Rs 25 lakh.
Also read: These three allowances of central government employees will go up 25% after latest DA hike; check details
What is gratuity?
Gratuity is a defined benefit plan given by the employer to the employee for rendering services continuously for five years or more.
According to the Payment of Gratuity Act, 1972, an employee can receive gratuity if he has rendered continuous service for at least five years with an organisation. This gratuity is payable to the employee:
a) On his superannuation, or
b) On his retirement or resignation
However, there is an exception where the condition of working continuously for five years with an organisation is not applicable.
Also read: 6 things central government employees should know about latest dearness allowance increase
Allowances that have increased after latest DA hike
Certain allowances, such as the Children's Education Allowance (CEA) and the Hostel Subsidy, automatically received revisions of up to 25% following the dearness allowance (DA) hike to 50% for its employees and retirees early this year.According to an Office Memorandum (OM) released by the Ministry of Personnel, Public Grievances and Pension Department of Personnel & Training dated April 25, 2024, “References are being received from various quarters with regard to the amount of Children Education Allowance (CEA) and Hostel Subsidy admissible consequent upon enhancement of Dearness Allowance payable to Central Government employees @ 50% w.e.f. 1s1January, 2024 announced vide Ministry of Finance, Department of Expenditure O.M. No.1/1/2024-E-II (B) dated 12th March, 2024.
The following shall be the revised limits for CEA and Hostel Subsidy:
- Reimbursement of Children's Education Allowance
- Divyang children
- Special Allowance for Child Care
These revisions are applicable with effect from January 1, 2024.
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