Death gratuity

Death gratuity is a lump sum paid by the central government to the family of a government servant who dies while in service, scaled by the length of qualifying service and computed on the last emoluments under Rule 45 of the Central Civil Services (Pension) Rules, 2021. It runs from 2 times emoluments for a death in the first year to 33 times emoluments for a full career, is subject to a ceiling of Rs. 25 lakh, and is fully exempt from income tax. It is the pension system’s first line of protection for a family whose earner dies before retirement.

The death gratuity is paid in place of the retirement gratuity that the employee would have drawn on superannuation , and it exists precisely because a retirement-gratuity formula built for a full career would leave the family of an employee who dies early with almost nothing. Where the retirement gratuity needs at least five years of qualifying service, the death gratuity needs none: it is payable from the first day of service, and the multiple of emoluments it pays rises with each service band so that a family is never left without a substantial sum. It sits alongside the family pension , which is the monthly payment the family draws after the death, and the two together are what the CCS (Pension) Rules, 2021 provide on death in service.

This article sets out the slab structure under Rule 45, the emoluments on which the death gratuity is computed, the way qualifying service is counted, the Rs. 25 lakh ceiling and how it rises with dearness allowance , the nomination that decides who receives the amount and the order of the family where no nomination exists, the interaction with the family pension, the residuary gratuity that protects a family for five years after retirement, the full income-tax exemption, and the payment mechanics including provisional sanction and interest on delay. Every load-bearing figure is cited to the CCS (Pension) Rules or the tax statute.

Death gratuity in the CCS (Pension) Rules

The death gratuity is one of three gratuities the pension rules pay, and keeping the three apart matters because they answer different situations. The retirement gratuity is paid on retirement to an employee with at least five years of service, at one-fourth of emoluments per completed six months up to 16.5 times. The service gratuity is paid, in place of a monthly pension, to an employee who retires with under ten years of service. The death gratuity is paid to the family when the employee dies in service, whatever the length of that service, and it replaces the retirement gratuity for that case.

All three are governed by the same rules and computed on the same emoluments base of basic pay plus dearness allowance, but the death gratuity has two features that set it apart. It carries no minimum-service condition, so it is earned from the first day, and its multiples are larger than the retirement gratuity’s at every stage, because they are built to compensate a family for a career cut short rather than to reward a completed one. For long service the death gratuity multiple is exactly double the retirement gratuity multiple: half of emoluments per six months against one-fourth, so 33 times against 16.5 times at the 33-year cap.

The rule that fixes the death gratuity is Rule 45 of the CCS (Pension) Rules, 2021, which sets both the retirement gratuity and the death gratuity. The nomination that decides who receives the death gratuity, and the order of the family where no nomination exists, are provided by the same rules through the gratuity nomination the employee files during service.

The three gratuities line up as follows.

The service gratuity is a different animal, paid in place of a pension to a short-career retiree, while the death gratuity and the retirement gratuity are alternatives to each other: the family gets the death gratuity when the employee dies in service, and the employee gets the retirement gratuity when they live to retire.

The slab structure under Rule 45

The death gratuity is not a single formula but a set of slabs, so that the family of an employee who dies after one year and the family of one who dies after twenty-five are each provided for on a scale that fits the length of service. The slabs, under Rule 45 of the CCS (Pension) Rules, 2021, are as follows.

The design of the first four bands is the point that a retirement-gratuity formula misses. A new employee who dies after fourteen months leaves the family six times monthly emoluments, and one who dies after a decade leaves twelve times, sums the one-fourth-per-six-months retirement formula would never reach on a short career. The steps are deliberately large at the front so that the protection is real for a family whose earner had barely begun.

The last band, for 20 years and above, switches to a per-period accrual: half of emoluments for every completed six-monthly period of qualifying service, subject to a maximum of 33 times emoluments. Because two completed six-month periods make a year, this works out to one times emoluments for each full year of service in the 20-years-and-above band, so 24 years gives 24 times emoluments and 30 years gives 30 times, until the 33-times ceiling is reached at 33 years, which is 66 completed six-month periods multiplied by half. An employee who has served long enough to reach this band therefore earns a death gratuity that keeps climbing with each further year of service, up to the 33-times cap.

Emoluments: the base for the calculation

Emoluments for the death gratuity are the basic pay the employee was drawing on the date of death, the pay matrix cell, plus the dearness allowance on that date. Dearness allowance was 60 per cent of basic pay from 1 January 2026 (Department of Expenditure OM 1/1(i)/2026-E.II(B) dated 22 April 2026), so a death in 2026 is computed on emoluments of 1.6 times basic pay. Non-practising allowance is added to emoluments where the employee was entitled to it.

Including dearness allowance in the base is what distinguishes the gratuity from the pension , which is computed on basic pay alone. A higher dearness allowance raises the death gratuity directly, because the emoluments the multiple applies to are larger, and it raises the Rs. 25 lakh ceiling too, since the ceiling steps up with dearness allowance. The emoluments are taken as on the date of death, so an employee who died shortly after a pay increment or a dearness-allowance revision has the death gratuity computed on the higher figure.

How qualifying service is counted

Qualifying service is the length of service that counts towards the pension and the gratuity, and for the death gratuity it decides which slab applies, and, in the 20-years-and-above band, how many completed six-month periods are counted. The service is counted in completed six-monthly periods, and the maximum counted is 33 years, which gives the 33-times cap. A period of a few months over a completed six-month block does not count, so service is effectively rounded down to the nearest six months for the calculation. The full treatment of what counts is in the qualifying service article.

One point specific to death in service is worth stating: the qualifying service is the service actually rendered up to the date of death, not the service the employee would have completed had they lived to retire. The slabs are built around this, which is why the first bands pay large multiples for short service. There is no notional addition of future service to the death gratuity, though a separate weightage does apply to the enhanced family pension for the first ten years after the death.

The Rs. 25 lakh ceiling

Over and above the formula, which caps the death gratuity at 33 times emoluments, a rupee ceiling applies, and that ceiling is the same one that applies to the retirement gratuity. It was Rs. 20 lakh under the 7th Central Pay Commission, and it increases by 25 per cent whenever dearness allowance rises by 50 per cent. Dearness allowance crossed 50 per cent on 1 January 2024, so the ceiling rose to Rs. 25 lakh with effect from that date, notified by the Department of Pension and Pensioners’ Welfare in May 2024.

The current death-gratuity ceiling is therefore Rs. 25 lakh, a figure worth stating plainly because Rs. 20 lakh is still widely quoted from before 2024. The actual death gratuity paid is the lower of the formula amount and Rs. 25 lakh. For a family where the slab multiple applied to emoluments exceeds Rs. 25 lakh, the death gratuity is capped at Rs. 25 lakh; for others the formula amount is paid in full. Because the ceiling tracks dearness allowance, it will rise again to Rs. 31.25 lakh when dearness allowance next crosses 100 per cent, which is the mechanism that keeps the ceiling in step with pay without a separate order each time.

Who receives it: nomination and the family

The death gratuity is paid to the person the employee named for the purpose, so nomination is the single most important step an employee can take during service to make sure the amount reaches the intended hands without delay. An employee makes a nomination for the retirement and death gratuity, ordinarily in favour of one or more members of the family, and can nominate a person outside the family only where there is no family. The nomination can name more than one person and fix the share of each, and it can be revised at any time, which employees should do after a marriage, a birth, or a death in the family.

The nomination decides both who receives the death gratuity and in what proportion. Where the employee has nominated more than one person, the death gratuity is divided among them in the shares the nomination specifies, and where a nominee has predeceased the employee, that share passes as the nomination provides or, failing that, to the other members of the family. A live and current nomination is what keeps a death-gratuity claim from turning into a dispute at the worst possible time for a family.

Distribution where there is no nomination

If no valid nomination exists when the employee dies, the death gratuity is not lost; it is paid to the members of the family in the shares fixed by the CCS (Pension) Rules. The rules define the family widely for this purpose and set an order, so the amount is distributed to the surviving members rather than held up. The spouse and children ordinarily take the death gratuity in equal shares, and the definition of family for the gratuity extends beyond the spouse and children to dependent parents and, in defined cases, to the widow and children of a predeceased son, which is wider than the definition used for the family pension.

The equal-shares rule among the eligible family members is what applies in the common case of a spouse and minor children with no nomination on record. Because the family definition and the order are set by the rules and not by the family, a nomination remains the cleaner path: it lets the employee direct the amount and the shares, rather than leaving the division to the default order. Where a dispute over entitlement arises, the sanctioning authority follows the order in the rules and, where necessary, requires a succession certificate.

The family for the death gratuity, where there is no nomination, is grouped so that the closer relations take first and the rest take only if none of the closer relations survive. The spouse and the children, including a legally adopted child and, in the defined cases, a step-child, form the first group and share the death gratuity equally. Only where no member of that first group survives does the amount pass to the wider group, which the rules extend to dependent parents, the widow and children of a predeceased son, and, in their turn, the employee’s brothers below the age of majority and unmarried or widowed sisters and the married daughters. A minor’s share is paid to the natural or legal guardian. This wider family definition, reaching dependent parents and a predeceased son’s family, is broader than the definition used to decide who draws the monthly family pension, which is why an entitlement to the death gratuity does not always track an entitlement to the family pension.

Death gratuity and family pension together

The death gratuity and the family pension are separate benefits, and a family that suffers a death in service receives both. The death gratuity is the one-time lump sum this article describes; the family pension is the monthly payment the family draws for life, or for the eligible period, after the death. Neither reduces the other, and the death gratuity is paid over and above the family pension.

The family pension itself is paid at an enhanced rate for the first ten years after a death in service, at 50 per cent of the last basic pay instead of the ordinary 30 per cent, before it steps down to the ordinary rate. That enhanced family pension and the death gratuity are the two immediate protections on death in service: the lump sum meets the immediate need, and the enhanced monthly pension carries the family through the years when the loss of the earner’s income bites hardest. The family pension calculation sets out how the monthly figure is worked out.

Residuary gratuity: the five-year protection after retirement

The death gratuity proper is for death in service, but a related benefit, the residuary gratuity , protects the family where an employee dies soon after retiring. Where a retired employee dies within five years of retirement, and the total of the retirement gratuity already paid, the commuted value of pension, and the pension actually drawn up to the date of death falls short of twelve times the emoluments at retirement, the deficiency is paid to the family as a residuary gratuity.

The residuary gratuity exists so that a full career does not leave the family worse off than a death in service would have. Without it, an employee who retired and died a year later might have drawn only a fraction of twelve times emoluments in pension and gratuity, while a colleague who died the day before retirement would have left the family a much larger death gratuity. The residuary gratuity closes that gap by guaranteeing the family at least twelve times emoluments across the retirement gratuity, the commuted value, the pension drawn, and the residuary top-up, over the first five years after retirement. It is paid to the same nominees, or to the family in the same order, as the death gratuity.

Income-tax exemption

The tax treatment is where the death gratuity, like the other CCS gratuities, is at its most favourable. Death gratuity paid to the family of a central government employee is fully exempt from income tax under Section 10(10)(i) of the Income-tax Act, 1961, with no monetary limit. The whole amount, up to the Rs. 25 lakh the rules allow, reaches the family tax-free.

The Rs. 25 lakh figure is often confused with a tax cap, and it is not one. It is the ceiling on the amount payable under the pension rules; the tax exemption itself is unlimited for a government employee’s gratuity. The Rs. 20 lakh cap that appears in the tax discussion is the exemption limit for a non-government employee’s gratuity under Section 10(10)(iii), a separate provision that does not apply here. For the wider treatment of a family’s tax position after a death, see income tax for pensioners ; the family pension itself is taxed differently from the tax-free death gratuity, with its own standard deduction.

Payment, provisional sanction, and interest on delay

The death gratuity is meant to reach the family quickly, and the rules build in two safeguards against delay. First, a provisional death gratuity can be sanctioned while the final amount is being settled, so the family is not left waiting on the full paperwork; the balance is paid once the final figure is fixed. Second, where the sanction of the death gratuity is delayed beyond three months from the date of death, the rules provide for interest on the amount for the period of delay, which is a discipline on the office rather than a benefit the family should have to claim.

The claim is processed by the head of office of the deceased employee, who initiates the family-pension and death-gratuity case, obtains the nomination on record, and forwards it for sanction and payment through the pension-disbursing machinery, with the Central Pension Accounting Office in the chain for authorisation. The Department of Pension and Pensioners’ Welfare sets the timelines and the forms for the death-in-service case, which are meant to run in parallel with the family-pension sanction so that both the lump sum and the first monthly pension follow close on the death.

Death gratuity where an employee goes missing

A death is not always a certainty at the moment a family needs support, and the rules cover the case where an employee disappears and is not traced. Where a government servant goes missing, the family may claim the family pension and the death gratuity after lodging a First Information Report with the police and after the period the rules prescribe has passed, on furnishing an indemnity bond, so that a family is not left indefinitely without the benefits while the employee remains untraced.

The death gratuity in a missing-employee case is worked out on the same Rule 45 slabs and the same emoluments as an ordinary death in service, taken as on the date the employee was last seen or the date the disappearance was reported, as the instructions provide. The Department of Pension and Pensioners’ Welfare has issued instructions that set the procedure and the period, and that allow the payment to be released against the indemnity bond so that a later reappearance can be reconciled. The purpose is the same as the rest of the death-gratuity scheme: to reach the family with support when the earner is gone, here without waiting on a formal presumption of death that can take years.

Withholding and recovery

The death gratuity is a right of the family, and it is far harder to withhold than a living employee’s retirement gratuity. Where departmental or judicial proceedings were pending against the employee at the time of death, the position differs from the retirement case: proceedings against a deceased employee ordinarily abate, so the death gratuity is generally released to the family rather than held against a proceeding that can no longer conclude in a penalty. A recovery of a pecuniary loss the employee caused to the government can still be made from the gratuity where the loss is established, but the routine reservation over a retiring employee’s gratuity for pending proceedings does not carry across to the death gratuity in the same way.

This is a narrow area, applied case by case and after due process, not a general power to hold back a family’s death gratuity. The practical effect is that the death gratuity is one of the more secure of a family’s entitlements, which is consistent with its purpose of meeting an immediate need on the death of the earner.

Death gratuity across the pension schemes

The death gratuity is paid under the same CCS (Pension) Rules formula to employees across the pension schemes, because the gratuity is a retirement benefit that sits apart from the pension mechanism. An employee on the Old Pension Scheme , the National Pension System , or the Unified Pension Scheme leaves the family a death gratuity computed on the same Rule 45 slabs and the same emoluments.

For the National Pension System, the death-gratuity benefit was extended so that a government employee covered by the NPS is not worse placed than an Old Pension Scheme colleague on death in service, and the family receives the death gratuity alongside the benefits payable from the NPS corpus under the option the family exercises. The Unified Pension Scheme, operative from 1 April 2025, carries the retirement and death gratuity in the same way. The death gratuity is therefore a constant across the schemes, and the difference between them lies in the pension side, not in the gratuity.

Worked examples

The death gratuity is emoluments multiplied by the slab factor, subject to the Rs. 25 lakh ceiling. Taking dearness allowance at 60 per cent, so emoluments are 1.6 times basic pay:

• An employee who dies after 8 months of service on basic pay of Rs. 35,000 has emoluments of Rs. 56,000 and falls in the under-1-year slab, so the death gratuity is 2 times Rs. 56,000, which is Rs. 1,12,000.
• An employee who dies after 3 years on basic pay of Rs. 44,900 has emoluments of Rs. 71,840 and falls in the 1-to-under-5-years slab, so the death gratuity is 6 times Rs. 71,840, which is Rs. 4,31,040.
• An employee who dies after 8 years on basic pay of Rs. 60,000 has emoluments of Rs. 96,000 and falls in the 5-to-under-11-years slab, so the death gratuity is 12 times Rs. 96,000, which is Rs. 11,52,000.
• An employee who dies after 15 years on basic pay of Rs. 78,800 has emoluments of Rs. 1,26,080 and falls in the 11-to-under-20-years slab, so the formula gives 20 times Rs. 1,26,080, which is Rs. 25,21,600, but this exceeds the ceiling, so the death gratuity is capped at Rs. 25 lakh.
• An employee who dies after 21 years on basic pay of Rs. 50,000 has emoluments of Rs. 80,000 and falls in the 20-years-and-above band, so the death gratuity is 21 times Rs. 80,000, which is Rs. 16,80,000, below the ceiling.

In each case the death gratuity is fully tax-exempt for the family, and it is paid over and above the family pension. To see the death gratuity alongside the pension and the other retirement benefits, see the central government pension framework and the pension calculation article.

Death gratuity and the 8th Central Pay Commission

The death-gratuity ceiling is tied to dearness allowance rather than to a pay commission, so it moves between commissions on its own: it went from Rs. 20 lakh to Rs. 25 lakh when dearness allowance crossed 50 per cent in 2024, and it will rise again when dearness allowance crosses 100 per cent. The 8th Central Pay Commission , constituted in November 2025, will review the retirement-benefit framework, and a pay revision that resets basic pay will raise the emoluments on which the death gratuity is computed.

Until the Commission reports, the death gratuity continues under the Rule 45 slabs, with the Rs. 25 lakh ceiling and emoluments including dearness allowance at 60 per cent from 1 January 2026. Any revised gratuity ceiling, slab, or emoluments base attributed to the 8th CPC is a projection until the Commission reports and revised rules are notified.

Related Articles

• Gratuity for central government employees
• Service gratuity
• Residuary gratuity
• Family pension
• Enhanced family pension
• Family pension calculation
• Nomination of pension and gratuity
• CCS (Pension) Rules, 2021
• Central government pension
• Central government pension calculation
• Commutation of pension
• Qualifying service
• Superannuation
• Invalid pension
• Old Pension Scheme
• National Pension System
• Unified Pension Scheme
• Income tax for pensioners
• Dearness allowance
• Dearness relief
• Department of Pension and Pensioners’ Welfare
• Central Pension Accounting Office
• Pay matrix
• 7th Central Pay Commission
• 8th Central Pay Commission
• Central government employees in India
• Gratuity calculator

External references

• Department of Pension and Pensioners’ Welfare
• CCS (Pension) Rules, 2021 (pensionersportal.gov.in)
• Central Pension Accounting Office
• Income Tax Department
• Department of Expenditure, Ministry of Finance

References

1. Central Civil Services (Pension) Rules, 2021, Rule 45 (retirement gratuity and death gratuity), setting the death-gratuity slabs by length of qualifying service and the 33-times maximum.
2. Department of Pension and Pensioners’ Welfare, Office Memorandum on the enhancement of the retirement and death gratuity ceiling to Rs. 25 lakh with effect from 1 January 2024, dated 30 May 2024.
3. Income-tax Act, 1961, Section 10(10)(i), exempting gratuity received by government employees and their families without limit, and Section 10(10)(iii) on the cap for other employees.
4. Central Civil Services (Pension) Rules, 2021, provisions on nomination of the retirement and death gratuity and the order of the family where no nomination exists, and on residuary gratuity where a retired employee dies within five years of retirement.
5. Department of Expenditure Office Memorandum 1/1(i)/2026-E.II(B), dated 22 April 2026, revising dearness allowance to 60 per cent of basic pay with effect from 1 January 2026.
6. Department of Pension and Pensioners’ Welfare instructions on the grant of family pension and death gratuity to the family of a government servant who has gone missing, prescribing the First Information Report, the waiting period, and the indemnity bond.
7. Ministry of Finance, Department of Expenditure, Resolution F. No. 01-01/2025-E.III(A), dated 3 November 2025, constituting the 8th Central Pay Commission.