Understanding Gratuity and Pension Entitlements After a Loved One's Passing in Service

Please inform me of the following details about gratuity. What will be the period of gratuity my brother will be entitled to, who has put in 35 years of service in the Railway department and has expired on 19.7.2010.

Particulars

The particulars are as follows:
- Date of joining: 15.05.1975
- Last pay drawn BP: 21570/-
- DA: 7550/-

Please confirm whether there is a difference in the period in a death case. Also, please inform me about how many years full pension will be made.

Regards

Dear,

In my view, the calculation should be as follows: Basic plus DA multiplied by 35, then multiplied by 15, and finally divided by 26. This would result in a total of 588,000/-.

Dear, please inform me of the following details about gratuity. What will be the period of gratuity that my brother will be entitled to receive, who has served for 35 years in the Railway department and passed away on 19.7.2010.

Particulars:

- Date of joining: 15.05.1975
- Last pay drawn: BP 21570/-
- DA: 7550/-

Please confirm whether there is a difference in the period in the case of death. Also, inform me about how many years of full pension will be provided.

Railways is a government organization and, therefore, is not governed by the Payment of Gratuity Act 1972. There is a difference between retirement and death gratuity, and the calculations are different.

For the calculation of pension under CCS (Pension) Rules, the date of birth/retirement of your brother (in case he had survived) and his salary as of 30 June 2010 are required.

Please let me know the necessary information.

Can anyone please let me know what is the difference between retirement and death gratuity???

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Hello,

Could you please explain the distinction between retirement and death gratuity? Thank you.

Dear,

Please provide the retirement date. For further details, you can contact me at 9426340064.

Sincerely,
S. S. Karadkar

Hi,

The formula to calculate gratuity is Basic + DA / 26 * 15 * No. of years worked. Hence, the calculation of Gratuity will be 21750 + 7550 / 26 * 15 * 35 = 588000/-. I hope you understand the formula.

Regards,
Deepa Palav

Dear Shashi Bhushan Singh, the gratuity will be calculated for 36 years as 1 year is counted for service of 6 months plus one day, so the years 1975 and 2010 will both be included. The formula for calculation is: salary last drawn * 15 * 36 / 26.

Gratuity Tax Exemption Update

According to the latest amendment in the gratuity act, gratuity up to 10 lakhs is exempted from tax against the earlier limit of 3.5 lakhs.

Regards,
Shashi Bhushan Singh

Dear,

In my opinion gratuity act also covers railways

Sec 1 sub sec 3A states that “it shall apply to every factory, mine, oilfield, plantation, port and railways company”

And the calculation will be for 36 yrs and amount of payment will be 604800 INR

Umesh Bhardwaj

Dear All, I fully agree with the contention of Shri bnps57 that in the subject case, government gratuity and pension rules are applicable and not the Payment of Gratuity Act, 1972. The reference quoted above about the coverage of railways in the Payment of Gratuity Act, 1972 is with reference to private railway companies which were in existence then. Now almost all railway lines are fully owned by the government of India, and the referee is talking about a government railway employee and not an employee of some private railway company, if any, in existence in India now. So, please provide the info to Shri bnps57 and get a right answer and also consult P. Muthuswamy's publication on Pension and Gratuity, if necessary.

Difference Between Death Gratuity and Retirement Gratuity

As for the query about the difference between death gratuity and retirement gratuity, I would like to say that on death, some employers pay higher gratuity as a goodwill gesture, sympathy, compassion, etc. In retirement gratuity, the calculation is simple. The other most important difference is - for retirement gratuity, the employee is required to render a minimum service of 5 years. For the death case, there is no such condition of minimum qualified service.

Regards,
Shyam Agrawal

Gratuity for Railway Employees

Gratuity for Railway Employees is payable under the Railway Services (Pension) Rules 1993. The maximum Death-cum-Retirement Gratuity (DCRG) will not exceed 33 times the emoluments for 35 years of qualifying service. In this case, the total gratuity payable is Rs. (21,750 + 7,550) * 66/2, i.e., Rs. 966,900. For further clarification and procedures for claiming gratuity, please refer to Chapter IX of the Railway Services (Pension) Rules 1993.

Regards,
I.K. ARORA

Dear friend, Railway is a government organization, and there are separate rules for PF, Bonus, Gratuity, Pension, etc. I am calculating the amount of family pension payable to the family member (widow) of your deceased brother as follows:

Normal Rate

- 30% of Pay + Grade Pay last drawn, i.e., Rs. 21,570.
- 21,570 x 30/100 = Rs. 6,471 per month or minimum Rs. 3,500.

Enhanced Rate

- Twice the normal rate limited to 50% of Pay + Grade Pay last drawn, i.e., 6,471 x 2 = Rs. 12,942, or 21,570 x 50/100 = Rs. 10,785 per month.

So, the widow will get a monthly family pension of Rs. 10,785 for a period of 10 years from the date of death at an enhanced rate and then Rs. 6,471 per month onwards. She will also get dearness relief on the monthly pension as announced from time to time.

Gratuity

In this case, death gratuity is payable to the nominee of the deceased employee. Since he had worked for 35 years, the calculation is as follows: total emoluments (Pay + Grade Pay + DA) x 33 or Rs. 1,000,000, whichever is least = Rs. (21,570 + 7,550) x 33 = Rs. 960,960.

Hope this will satisfy you. For any doubt, you may contact me.

Regards,
BNP Singh
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