Re-employment after retirement
Re-employment of retired central government employees: the 2002 DoPT bar beyond 60, DoE contract pay rules of 2020 and 2023, ex-servicemen, DR and pension.
Re-employment after retirement is the fresh appointment of a person who has retired from central government service and whose pension or retirement benefits are already in payment, governed in the Union by the Department of Personnel and Training (DoPT) Office Memorandum No. 26012/6/2002-Estt.(A) dated 9 December 2002, the CCS (Fixation of Pay of Re-employed Pensioners) Orders, 1986, and the CCS (Pension) Rules, 2021. It differs from extension of service, which keeps an existing appointment alive past the retirement age, and from a contract engagement at a fixed fee.
The 2002 Office Memorandum states the general position in one sentence: no proposal for employing a government servant beyond the age of superannuation of 60 years shall be considered. It adds that no person can be appointed or reappointed to central government service after 60 through contract, and it exempts military pensioners who have not reached the civil superannuation age. That exemption, together with the Ex-servicemen (Re-employment in Central Civil Services and Posts) Rules, 1979, is why most re-employment below 60 in civil posts is of ex-servicemen.
A second route runs past 60 under a Department of Expenditure order. Office Memorandum No. 3-25/2020-E.IIIA dated 9 December 2020 regulates the remuneration of retired central government employees appointed on contract, including consultants, at the last pay drawn minus the basic pension, for a term that cannot run beyond five years after superannuation. A companion Office Memorandum of 18 October 2023 sets a different formula for retirees under the National Pension System.
Re-employment changes almost every retirement entitlement. Dearness relief on the pension stops under Rule 52(2) of the CCS (Pension) Rules, 2021 unless three conditions are met, the re-employed service earns no second pension under Rule 6(2), and misconduct in the re-employed post can still cost the pension under Rule 8(1). The pay itself is fixed against the pension under a separate set of orders, covered in pay fixation on re-employment.
This article covers the bar and its exceptions, the contract appointment rules and their two formulas, ex-servicemen, the effect on dearness relief, pension, discipline and commercial employment, the railway re-engagement scheme, and the income tax on pension plus salary.
Re-employment, extension of service and contract engagement
Three arrangements keep a person at work in government after the normal retirement date, and each has its own instrument, pay rule and status.
| Feature | Extension of service | Re-employment | Contract appointment of a retiree |
|---|---|---|---|
| Break in service | None; the same appointment continues | Yes; the person retires and is appointed afresh | Yes; the person retires and signs a contract |
| Governing instrument | Fundamental Rule 56(d) and its provisos | DoPT OM 26012/6/2002-Estt.(A), 9 December 2002; recruitment rules | DoE OM 3-25/2020-E.IIIA, 9 December 2020 |
| Pension in payment | No; retirement is postponed | Yes | Yes |
| Pay | Pay of the post continues, with increments | Fixed under the CCS (Fixation of Pay of Re-employed Pensioners) Orders, 1986 | Last pay drawn minus basic pension, fixed for the term |
| Dearness allowance | Yes | Yes, on pay before pension is deducted (Order 11 of the 1986 Orders) | No (paragraph 6.3 of the 2020 OM) |
| Age limit | 62, 64 or 66 in the listed cases, or a fixed total term for the listed Secretaries | 60 for civil pensioners under the 2002 OM | 5 years after superannuation |
Fundamental Rule 56(d) opens with the bar that no government servant shall be granted extension in service beyond 60 and then lists every exception: three months for budget work or a committee about to be wound up, up to 62 for a specialist in a medical or scientific field, up to 64 for an eminent scientist of international stature, a total term for the Cabinet Secretary and a named set of Secretaries and agency heads, and a maximum age of 66 for the Secretaries of the Department of Space and the Department of Atomic Energy. Note 5 below Fundamental Rule 56 forbids promotion during an extension. The detail sits in superannuation and retirement age of central government employees.
Re-employment starts from the opposite end. The person has already retired, drawn the gratuity and the commuted value of pension, and has a pension payment order in hand. The DoPT Guidelines for framing recruitment rules dated 31 December 2010 list re-employment in paragraph 3.11.1 as one of six methods of recruitment, alongside promotion, direct recruitment, deputation, absorption and short-term contract. Under paragraph 3.10.2 of the same guidelines, re-employment before superannuation carries a probation of two years and re-employment after superannuation carries none.
The DoPT bar on re-employment beyond 60
DoPT Office Memorandum No. 26012/6/2002-Estt.(A) dated 9 December 2002 is the operative instruction on both extension and re-employment, and its re-employment paragraph is two sentences long. The first bars any proposal to employ a government servant beyond the age of superannuation of 60 years. The second clarifies that no person can be appointed or reappointed to central government service after 60 through contract, which closes the obvious route around the first.
The 2002 OM replaced DoPT OM No. 26011/1/77-Estt.(B) dated 18 May 1977, which was issued when the retirement age was 58. The age of superannuation was raised to 60 by DoPT Notification No. 25012/2/97-Estt.(A) dated 13 May 1998 and 27 May 1998, amending Fundamental Rule 56(a), and the 2002 OM rewrote the extension and re-employment instructions for that age. DoPT’s consolidated Office Memorandum DOPT-1669894287310 dated 1 December 2022, titled “Superannuation, extension in service, re-employment, premature retirement and VRS”, still reproduces the 2002 text and cites it as the source.
Paragraph 10 of the 2002 OM carves out one class: re-employment of military pensioners who have not reached the age of superannuation for central government employees is not governed by those instructions. Paragraph 11 points to a separate instruction for consultants, DoPT OM No. 16012/7/97-Estt.(Allowance) dated 13 February 1998.
The Department of Expenditure OM of 9 December 2020 recites the 2002 OM in paragraph 2 as a current DoPT instruction before regulating contract appointments made after 60, and the 2022 DoPT consolidation still reproduces it. The two instruments sit side by side: the DoPT bar states the policy, and the Department of Expenditure order governs the pay of the contract appointments that are made in spite of it, on “adequate functional necessity with clear grounds” placed before the appointing authority.
Who is re-employed before 60
A civil pensioner below 60 is the exception, because a central government servant who stays in service normally retires at 60 under Fundamental Rule 56(a). The re-employed population under 60 comes from four sources.
- Military pensioners. Personnel of the Army, Navy and Air Force typically retire well before 60 with a service pension, and paragraph 10 of the 2002 OM expressly leaves their re-employment outside its bar. They enter civil posts through the reserved vacancies of the 1979 Ex-servicemen Rules.
- Voluntary retirement and premature retirement. A civil servant who retires under Rule 43 of the CCS (Pension) Rules, 2021 after 20 years’ qualifying service, or is retired under Fundamental Rule 56(j), is a pensioner below 60 and can be appointed to another post through open recruitment.
- Invalid pension and compensation pension holders. Order 6 of the 1986 Orders gives them a choice, on re-employment in qualifying service, between keeping the pension and giving it up so that the earlier service counts.
- Retirees of state governments, public sector undertakings and autonomous bodies. Order 2 of the 1986 Orders applies to persons re-employed in central civil posts after retirement from a state government, a Union territory, a public sector undertaking, a local body or an autonomous body such as a university.
Posts in a committee or commission set up for a limited period follow a fixed order of preference under the 2010 recruitment rules guidelines: deputation from within the ministry that set it up, then circulation on an all-Secretariat basis, then re-employment of retired pensioners. Re-employment is the last of the three.
Contract appointment of retired employees under the 2020 Department of Expenditure OM
Department of Expenditure Office Memorandum No. 3-25/2020-E.IIIA dated 9 December 2020 fixes the remuneration, allowances, leave and term of every retired central government employee appointed on contract, including a consultant on contract, and it applies to appointments made in the central government from the date of issue. The OM records that no uniform guidelines existed before it and that DoPT was drafting a note for the Committee of Secretaries on engaging retired officers as consultants; it applies until DoPT issues those instructions.
Paragraph 3 of the OM records DoPT’s position that the 1986 pay fixation orders and the DoPT OM of 1 May 2017 apply only to persons appointed on re-employment, and not to persons employed on contract except where the contract provides otherwise. A retiree engaged on contract after 60 is therefore paid under the 2020 OM, not the 1986 Orders.
| Term | Rule under DoE OM 3-25/2020-E.IIIA, 9 December 2020 |
|---|---|
| Remuneration (paragraph 6.1) | Fixed monthly amount: pay drawn at retirement minus basic pension |
| Commuted pension (paragraph 6.2) | Counted in the pension deducted; the full basic pension comes off |
| Increment and dearness allowance (paragraph 6.3) | None during the term |
| House rent allowance (paragraph 7.1) | Not admissible |
| Transport allowance (paragraph 7.2) | A fixed amount, not above the rate applicable at retirement; TA and DA on official tour may be allowed to consultants at the retirement entitlement |
| Leave (paragraph 7.3) | Paid leave may be allowed at 1.5 days for each completed month; accumulation beyond the calendar year may not be allowed |
| Initial term (paragraph 8.1) | Ordinarily not more than one year, extendable by one year |
| Longest term (paragraph 8.1) | Not beyond 5 years after superannuation, after review of task and performance |
| Confidentiality (paragraph 8.2) | Agreement with a clause on ethics and integrity |
| Exemptions (paragraph 9) | Special terms allowed by the Appointments Committee of the Cabinet, or by DoPT or the Department of Expenditure |
| Relaxation | Referred to the Department of Expenditure |
The OM’s worked example in paragraph 6 takes an employee who retired in Level 13 with pay of Rs. 1,55,900 and a basic pension of Rs. 77,950. The remuneration is Rs. 77,950 (Rs. 1,55,900 minus Rs. 77,950). If that employee commuted 40% of the pension, the commuted portion is Rs. 31,180 and the pension actually drawn is Rs. 46,770, but the deduction from the last pay is still the full Rs. 77,950.
Paragraph 6.1 keeps the remuneration unchanged for the term of the contract, with no annual increment or percentage increase.
Contract remuneration of NPS retirees under the 2023 OM
Department of Expenditure Office Memorandum No. 03-25/2020-E.III(A)/Pt dated 18 October 2023 sets a separate formula for central government employees who retired under the National Pension System and are then appointed on contract: 30% of the last basic pay drawn at retirement is deducted from that last basic pay, and the balance is the fixed monthly remuneration. Paragraphs 5, 6.3, 7, 8 and 9 of the 2020 OM (the appointment conditions, no increment or dearness allowance, allowances, term and exemptions) apply to NPS retirees unchanged, and the 2023 OM took effect from its date of issue.
Paragraph 2 of the 2023 OM gives the reason. An NPS annuity comes from a corpus built from both government and employee contributions, so it is “altogether different” from a pension paid wholly by the government under the CCS (Pension) Rules, 2021.
The table below applies both formulas to the same last pay: the Level 10 cell of Rs. 1,01,400 in the 7th CPC pay matrix. The CCS (Pension) Rules row assumes a pension of 50% of that last pay under Rule 44 of the CCS (Pension) Rules, 2021.
| Retiree | Last basic pay | Deduction | Monthly contract remuneration | Source |
|---|---|---|---|---|
| CCS (Pension) Rules, 2021 pensioner | Rs. 1,01,400 | Basic pension Rs. 50,700 | Rs. 50,700 | DoE OM, 9 December 2020, paragraph 6.1 |
| NPS retiree | Rs. 1,01,400 | 30% of last basic pay, Rs. 30,420 | Rs. 70,980 | DoE OM, 18 October 2023, paragraph 3 |
The NPS retiree’s remuneration is Rs. 20,280 a month higher on the same last pay. The difference is the 20 percentage point gap between the 50% pension deduction and the 30% notional deduction.
Consultants, the 1998 DoPT scheme and GFR Rule 177
Rule 177 of the General Financial Rules, 2017 defines consulting services for procurement and states that the term does not include direct engagement of a retired government servant. A retiree engaged as a consultant is not procured under Chapter 6 of the General Financial Rules; the engagement is an appointment on contract, and its remuneration follows the Department of Expenditure OM of 9 December 2020, which names consultants on contract in its title paragraph.
The older DoPT instruction is OM No. 16012/7/97-Estt.(Allowance) dated 13 February 1998, to which paragraph 11 of the 2002 OM refers. It set three conditions: that no retired government servant “should be engaged as a Consultant beyond the age of 62 years”, that for a full-time consultant the fee plus the pension should not exceed the last pay drawn, and that no more than two retirees should be engaged at a time in a ministry or department. The 2020 OM does not refer to the 1998 OM and allows a contract term to run to five years after superannuation, which is 65 for a superannuation retiree; no instrument states whether the 62-year limit of 1998 survives it.
Order 2 of the 1986 Orders separately excludes a person appointed as a consultant on a consolidated fee from pay fixation on re-employment, so no part of such a consultant’s pension is deducted under the 1986 Orders.
Ex-servicemen re-employment rules, 1979
The Ex-servicemen (Re-employment in Central Civil Services and Posts) Rules, 1979, first notified as G.S.R. 1530 dated 15 December 1979, reserve vacancies for ex-servicemen in central civil services and posts and relax the age limits for them. DoPT consolidated them in its Compendium of Guidelines on Reservation for Ex-Servicemen, Office Memorandum DOPT-1766747426976 dated 25 December 2025, and the online compendium also reproduces the amendment of 9 February 2026.
The Rules have been amended five times: by G.S.R. 973 dated 27 October 1986, G.S.R. 333(E) dated 27 March 1987, G.S.R. 757(E) dated 4 October 2012, G.S.R. 116(E) dated 13 February 2020, and G.S.R. 115(E) dated 9 February 2026. The 2020 amendment gave ex-serviceman status to short service commissioned officers released after their initial terms of engagement with gratuity. The 2026 amendment rewrote rule 2(c)(i) to cover service “in the Regular Army or Navy or Air Force of the Indian Union or Military Nursing Service of the Indian Union”, bringing the Military Nursing Service into the definition.
The compendium states that “The reservation for Ex-servicemen is horizontal in nature”. An ex-serviceman selected against the ex-servicemen quota who belongs to the Scheduled Castes, Scheduled Tribes or Other Backward Classes is adjusted against the vacancies reserved for that category, and where none is free in that recruitment, against the next available vacancy of that category.
| Post | Reservation for ex-servicemen |
|---|---|
| Group C posts | 10% of vacancies |
| Group D posts | 20% of vacancies |
| Posts up to Assistant Commandant in BSF, CRPF, ITBP, CISF, Secretariat Security Force, Assam Rifles and RPF | 10% of vacancies |
Source: DoPT compendium DOPT-1766747426976 dated 25 December 2025.
The age relaxation depends on the group of the post and the mode of recruitment, per the same compendium.
- Group B (non-gazetted), Group C and Group D posts: the length of military service is deducted from the actual age, and the candidate is eligible if the result does not exceed the maximum age limit by more than three years.
- Group A and Group B (gazetted) posts filled otherwise than through an open all-India competitive examination: the upper age limit is relaxed by the length of military service increased by three years.
- All-India competitive examinations: an ex-serviceman with at least five years’ military service, released on completion of the assignment or on account of a disability attributable to military service, gets up to five years’ relaxation in the upper age limit.
The reservation is used once. An ex-serviceman who has already joined a regular central civil post keeps the age relaxation when applying for a higher post, but the compendium states that “such candidates will not be eligible for the benefit of reservation, if any, for ex-servicemen in Central Government”. DoPT OM No. 36034/1/2014-Estt (Res.) dated 14 August 2014 allows one exception: an ex-serviceman who applied for several vacancies before joining any civil employment can use the reservation for a later appointment arising from those applications, on a self-declaration given on joining. Applications made after joining do not qualify.
Two instruments settle the pension position of an ex-serviceman in a civil post, each with its own trigger date. Explanation 3 to Rule 20 of the CCS (Pension) Rules, 2021 covers a government servant who joined military service after 31 December 2003: on re-employment in a civil post the person continues to draw the military pension or retain the gratuity received on discharge, and is covered by the rules governing the National Pension System. Paragraph 3 of DoPPW OM No. 28/90/2022-P&PW(B)/8297 dated 2 October 2022 applies to a military pensioner re-employed in a civil post after 31 December 2003, who “shall continue to draw the military pension and/or retain gratuity received on discharge from military service” and is likewise covered by the National Pension System rules.
Pay on regular re-employment
Pay on regular re-employment is fixed under the CCS (Fixation of Pay of Re-employed Pensioners) Orders, 1986, issued with DoPT OM No. 3/1/85-Estt.(Pay II) dated 31 July 1986, as extended to the 7th CPC pay matrix by DoPT OM No. 3(3)/2016-Estt.(Pay II) dated 1 May 2017. The pay is fixed in the level of the re-employed post and the pension, less an ignorable part, is set off against it. Three figures govern the result:
- Ignorable pension: the first Rs. 15,000 of pension is ignored from 1 January 2016, under paragraph 5 of the 2017 OM.
- Ceiling: pay plus gross pension cannot exceed Rs. 2,25,000, under paragraph 4 of the same OM.
- Level limit: the 2017 instructions cover re-employment against civil posts carrying pay up to Level 17, under paragraph 10.
An ex-serviceman who retired below commissioned rank, and a civil pensioner who held no Group A post, have the whole pension ignored under Order 4(d)(i) if they retired before attaining 55, and are then fixed at the first cell of the level under Order 4(b)(i). A civil pensioner who retired on superannuation at 60 has the pension above the ignorable Rs. 15,000 deducted. Increments, house rent allowance and dearness allowance run on the pay before the pension is deducted, under Orders 5 and 11. The three fixation routes, the worked examples and the special categories are in pay fixation on re-employment.
Dearness relief on pension during re-employment
Rule 52(2) of the CCS (Pension) Rules, 2021 stops dearness relief on a civil pension or compassionate allowance for the whole period during which the pensioner is re-employed under the central government, a state government, or a corporation, company, body or bank under them, in India or abroad, including permanent or immediate absorption. The proviso restores it only when all three of these conditions hold:
- before re-employment, the pensioner was not holding a Group A post;
- pay in the re-employed post was fixed at the minimum of the scale or level, and that minimum was below the pay drawn immediately before retirement; and
- the entire pension sanctioned by the central government was ignored in fixing that pay.
Rule 52(3) makes the pensioner obtain a certificate of the three facts from the re-employing organisation to claim the relief. Rule 52(4) excludes a family pensioner in employment from sub-rules (2) and (3) altogether, so a widow employed in government continues to draw dearness relief on the family pension.
The same position was set in 1999 for the 5th CPC. DoPPW OM No. 45/73/97-P&PW(G) dated 2 July 1999, effective from 18 July 1997, ignored the whole pension of civilian pensioners below Group A and of ex-servicemen who held posts below commissioned rank, and states that “In all other cases of re-employed pensioners, no dearness relief shall be admissible on pension during the period of their re-employment.” It left orders for defence pensioners to the Ministry of Defence.
The defence order is Ministry of Defence letter No. 7(1)/95/D(Pen/Services) dated 28 August 2000, as reproduced in PCDA (Pension) Allahabad Circular No. 179 dated 12 May 2015. For personnel below officer rank, the whole military pension is ignored in fixing civil pay at the minimum, and they are entitled to dearness relief on their pension. The same circular, citing DoPPW UO No. 41/42/2007/P&PW(G) dated 3 April 2008, treats pay as fixed at the minimum where advance increments were given without protection of last pay drawn, for an ex-serviceman who retired below commissioned rank before 55. The pension disbursing agency decides the claim on a certificate from the re-employing office stating whether last pay protection was given.
The 2000 letter, as reproduced in the circular, addresses only personnel below officer rank; the 1999 DoPPW OM left all defence pensioners to orders of the Ministry of Defence.
Pension, gratuity and NPS for the re-employed period
Re-employed service earns no second pension. Rule 6(1) of the CCS (Pension) Rules, 2021 bars two pensions in the same service or post, at the same time or by the same continuous service, and Rule 6(2) provides that a pensioner re-employed after retiring on a superannuation, retiring or compulsory retirement pension, or while drawing a compassionate allowance, “shall not be entitled to a separate pension or gratuity for the period of his re-employment”.
Rules 19 and 20 are the two exceptions, and both closed on 31 December 2003. Rule 19 lets an invalid or compensation pensioner re-employed on or before that date count the earlier civil service, where the person had opted under the 1972 Rules to cease drawing the pension and to refund, or agree to refund, the gratuity and commuted value as those Rules required. Rule 20 does the same for military service rendered before re-employment in a civil post on or before that date. Rule 31(8) protects a pensioner who retained the earlier pension and whose re-employed pay was reduced by an amount not exceeding it: the element of pension by which the pay was reduced counts as emoluments for the second pension.
A re-employee appointed after 31 December 2003 to whom the CCS (Implementation of National Pension System) Rules, 2021 apply contributes on emoluments that, under Rule 5(7), include the element of pension by which the re-employed pay was reduced. The CCS (Implementation of Unified Pension Scheme under National Pension System) Rules, 2025, notified as G.S.R. 599(E) dated 2 September 2025, carry an identical Rule 5(7). Both sets of rules exclude, by Rule 2(f), persons employed on contract, so a retiree on a contract under the 2020 Department of Expenditure OM makes no NPS or UPS contribution.
Family pension follows the same logic. Rule 50(16) of the CCS (Pension) Rules, 2021 provides that nothing in the family pension rule applies to a re-employed government servant who retired from civil or military service if, on re-employment, the person is not eligible for a pension or service gratuity under those rules. The family of such a re-employee draws the family pension attached to the first retirement, not a second one.
Leave during regular re-employment is earned under the CCS (Leave) Rules, 1972. Rule 39(6)(a)(iii) allows leave encashment at the end of the re-employment subject to 300 days in all, including what was encashed at the first retirement, so a pensioner who encashed the full 300 days on superannuation encashes nothing further.
Discipline and withholding of pension for re-employed service
A re-employed pensioner in a regular civil post holds a civil post under the Union and so falls within Rule 2(h) and Rule 3(1) of the CCS (CCA) Rules, 1965, which apply to every government servant who holds a civil post. Rule 3(1)(d) excludes “any person subject to discharge from service on less than one month’s notice”, which is the clause to check against the notice period in any contract of engagement.
Rule 8(1) of the CCS (Pension) Rules, 2021 carries the pension consequence. The President may withhold or withdraw a pension, in full or in part, and recover a pecuniary loss caused to the government, where the pensioner is found guilty of grave misconduct or negligence during service, “including service rendered upon re-employment after retirement”. The Union Public Service Commission is consulted before a final order.
Rule 8(2)(a) deems departmental proceedings instituted while the person was in service, “whether before his retirement or during his re-employment”, to be proceedings under Rule 8 after the final retirement, and they continue before the authority that started them. Proceedings not started before retirement or during re-employment need the President’s sanction and cannot concern an event more than four years old, under Rule 8(2)(c). The procedure is in withholding of pension and departmental inquiry.
Commercial employment and the date of retirement
Rule 9 of the CCS (Pension) Rules, 2021 requires a pensioner who held a Group A post to obtain prior sanction before accepting commercial employment within one year of retirement. Explanation (b) to Rule 9 shifts the start of that year for a re-employee: where the government servant was re-employed after retirement without a break, in the same or another Group A post under the government or an equivalent post under a state government, the date of retirement means the date on which the person finally ceases to be re-employed.
The Explanation applies only to re-employment without any break in a Group A post under the government or an equivalent state government post. For a pensioner who meets those conditions, the one-year window for Rule 9 sanction runs from the end of the re-employment, not from the first retirement. The application route and the grounds are in post-retirement commercial employment.
Railway re-engagement of retired staff under RBE No. 96/2024
The Railway Board scheme for re-engaging retired non-gazetted staff is RBE No. 96/2024 dated 15 October 2024, “Re-engagement of retired staff against vacant posts on contractual basis”. Railway servants have their own pension code, the Railway Services (Pension) Rules, 2026, but the re-engagement letter adopts the Department of Expenditure remuneration formula of 9 December 2020 without change.
| Condition | RBE No. 96/2024, 15 October 2024 |
|---|---|
| Eligible staff | Non-gazetted staff retired in Level 1 to Level 7 |
| Post | A vacant post in the same level held at retirement |
| Approving authority | General Manager only |
| Maximum age | 65 |
| Remuneration | Last pay drawn minus basic pension; no increment, dearness allowance or house rent allowance |
| Individual term | One year, extendable by one year or up to 65, whichever is earlier |
| Excluded | Retirees under the Safety Related Retirement Scheme or LARSGESS; staff with DAR or vigilance cases |
| Selection | Committee fixed by the General Manager; last 5 APARs considered |
| Powers | No financial or D&AR powers; cannot issue a safety certificate |
| Discharge | On joining of candidates selected by the Railway Recruitment Boards |
| Scheme duration | Initial 2 years from the date of issue, or till further orders, whichever is earlier |
Read literally, the two-year clause ends the scheme on 14 October 2026, and because the letter says “whichever is earlier”, further orders can only shorten it; running past that date needs a fresh order of the Railway Board.
Income tax on pension and re-employment salary
A re-employed pensioner’s pension and salary are both chargeable under the head Salaries: Section 15(2) of the Income-tax Act, 2025 provides that an employer includes a former employer, and Section 16(b) that salary includes any pension. The two are aggregated into one salary income. The standard deduction under Section 19(1) Table serial 2 is allowed once per person, not once per source: Rs. 75,000 in the new regime and Rs. 50,000 in the old regime for tax year 2026-27, per the standard deduction article.
The commuted value of pension received at the first retirement is fully exempt for a government pensioner under Section 19(1) Table serial 7, and re-employment does not change that; the detail is in income tax for pensioners.
Re-employment of Tribunal members
The Central Administrative Tribunal has its own statutory rule. A proviso to Section 10 of the Administrative Tribunals Act, 1985, inserted by Act 1 of 2007, deems a serving government officer appointed as a member to have retired from service on the date of assuming charge, and allows the member, at their option, to count the later service as a member as post-retirement re-employment for pension and other retirement benefits in the service to which they belonged.
Frequently Asked Questions (FAQs)
Can a retired central government employee be re-employed after 60?
What is the difference between extension of service and re-employment?
How is the remuneration of a retired employee appointed on contract fixed?
How is the contract remuneration of an NPS retiree fixed?
How long can a retired employee stay on a contract appointment?
Does a re-employed pensioner get dearness relief on the pension?
Does an ex-serviceman re-employed in a civil post keep dearness relief on the military pension?
What reservation do ex-servicemen get in central government posts?
Does re-employed service earn a second pension?
Can a re-employed pensioner be proceeded against for misconduct?
Is a contract appointee covered by the National Pension System?
How is a re-employed pensioner taxed?
Can the railways re-engage retired staff?
Is a retired officer engaged as a consultant a consultancy under the General Financial Rules?
Related Articles
- Pay fixation on re-employment
- Superannuation
- Retirement age of central government employees
- Fundamental Rule 56
- Fundamental Rules
- Premature retirement (FR 56(j))
- Voluntary retirement
- Central government pension
- CCS (Pension) Rules, 2021
- Emoluments
- Qualifying service
- Invalid pension
- Compensation pension
- Compassionate allowance
- Dearness relief
- Dearness allowance
- Commutation of pension
- Gratuity for central government employees
- Family pension
- PPO and life certificate
- Withholding of pension
- Departmental inquiry
- CCS (CCA) Rules, 1965
- Post-retirement commercial employment
- Vigilance clearance
- Recruitment rules
- Reservation in central government jobs
- Ex-servicemen re-employment rules, 1979
- Deputation in central government
- Absorption
- Appointments Committee of the Cabinet
- General Financial Rules
- National Pension System
- CCS (Implementation of NPS) Rules
- Unified Pension Scheme
- CCS (Leave) Rules, 1972
- Leave encashment
- Railway Services (Pension) Rules, 2026
- Standard deduction
- Income tax for pensioners
- Central Administrative Tribunal
- Department of Personnel and Training
- Department of Expenditure
External references
- DoE Office Memorandum No. 3-25/2020-E.IIIA dated 9 December 2020
- DoPPW Office Memorandum No. 45/73/97-P&PW(G) dated 2 July 1999
- DoPT Office Memorandum No. 16012/7/97-Estt.(Allowance) dated 13 February 1998
- Department of Personnel and Training
- Department of Expenditure
- Department of Pension and Pensioners’ Welfare
- Department of Ex-Servicemen Welfare
- Indian Railways, Railway Board
References
- Department of Personnel and Training, Office Memorandum No. 26012/6/2002-Estt.(A) dated 9 December 2002 (extension of service and re-employment beyond the age of superannuation), paragraphs 9, 10 and 11; reproduced in DoPT consolidated Office Memorandum DOPT-1669894287310 dated 1 December 2022.
- Department of Expenditure, Office Memorandum No. 3-25/2020-E.IIIA dated 9 December 2020 (regulation of remuneration in case of contract appointment of retired central government employees), paragraphs 2 to 10.
- Department of Expenditure, Office Memorandum No. 03-25/2020-E.III(A)/Pt dated 18 October 2023 (remuneration of retirees under the National Pension System appointed on contract), paragraphs 2 to 5.
- Ex-servicemen (Re-employment in Central Civil Services and Posts) Rules, 1979, G.S.R. 1530 dated 15 December 1979, as amended to G.S.R. 115(E) dated 9 February 2026; DoPT Compendium of Guidelines on Reservation for Ex-Servicemen, DOPT-1766747426976 dated 25 December 2025; DoPT OM No. 36034/1/2014-Estt (Res.) dated 14 August 2014.
- Central Civil Services (Pension) Rules, 2021, G.S.R. 868(E) dated 20 December 2021: Rules 6, 8, 9 (Explanation (b)), 19, 20 (Explanation 3), 31(8), 50(16) and 52(2) to (4).
- Department of Pension and Pensioners’ Welfare, Office Memorandum No. 45/73/97-P&PW(G) dated 2 July 1999, effective 18 July 1997; Office Memorandum No. 28/90/2022-P&PW(B)/8297 dated 2 October 2022; PCDA (Pension) Allahabad Circular No. 179 dated 12 May 2015, reproducing Ministry of Defence letter No. 7(1)/95/D(Pen/Services) dated 28 August 2000.
- CCS (Fixation of Pay of Re-employed Pensioners) Orders, 1986, DoPT OM No. 3/1/85-Estt.(Pay II) dated 31 July 1986; DoPT OM No. 3(3)/2016-Estt.(Pay II) dated 1 May 2017, paragraphs 4, 5 and 10.
- CCS (Implementation of National Pension System) Rules, 2021, G.S.R. 227(E) dated 31 March 2021, Rules 2(f) and 5(7); CCS (Implementation of Unified Pension Scheme under National Pension System) Rules, 2025, G.S.R. 599(E) dated 2 September 2025, Rules 2(f) and 5(7).
- Railway Board, RBE No. 96/2024 dated 15 October 2024 (re-engagement of retired staff against vacant posts on contractual basis).
- General Financial Rules, 2017, Rule 177; CCS (CCA) Rules, 1965, Rules 2(h) and 3(1)(d); DoPT Guidelines for framing and amendment of recruitment rules dated 31 December 2010, paragraphs 3.10.2 and 3.11.1.