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New NPS gratuity rules 2025: Who is eligible for second gratuity and who is not?

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By Sangeeta Ojha

2 min read | Updated on December 29, 2025, 13:26 IST

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SUMMARY

The Centre has clarified that re-employed government employees under the National Pension System (NPS) will not be entitled to a separate gratuity in certain cases. Here’s what the latest government note says.

NPS gratuity rules

The DoPPW also reiterated earlier instructions on counting past service for gratuity purposes. | Image: Shutterstock

The Centre has clarified that government employees covered under the National Pension System (NPS) will not be entitled to a second gratuity after re-employment, if gratuity has already been paid at the time of their first retirement.
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In an Office Memorandum issued by the Department of Pension and Pensioners’ Welfare (DoPPW) dated 26 December, the government said that "under Rule 4A of the Central Civil Services (Payment of Gratuity under NPS) Amendment Rules, 2025, gratuity is treated as a one-time terminal benefit. Accordingly, a government servant who has retired on superannuation, retiring gratuity, compulsory retirement gratuity, or has received compassionate gratuity, shall not be eligible for a separate gratuity for any subsequent period of re-employment."
However, the memorandum provides certain exceptions. Employees who were earlier appointed in a public sector undertaking (PSU) or autonomous body and later joined government service with proper permission may receive gratuity for their government service in addition to the gratuity already drawn from the PSU or autonomous body. In such cases, the total gratuity payable will be capped at the amount that would have been admissible had the employee served continuously under the Central Government until retirement.

The DoPPW also reiterated earlier instructions on counting past service for gratuity purposes. Where an employee draws gratuity separately for State Government and Central Government service, the combined gratuity amount must not exceed what would have been admissible if the employee had continued in government service and retired on the same pay drawn from the latter service.

Addressing queries related to ex-servicemen re-employed in civil posts, the government clarified that gratuity for civil service rendered after re-employment will not be restricted with reference to the gratuity already received for military service. This clarification has been issued in consultation with the Department of Expenditure.

The order has also been issued in consultation with the Comptroller and Auditor General of India in respect of personnel serving in the Indian Audit and Accounts Department. Ministries and departments have been directed to ensure strict implementation of the revised provisions.

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About The Author

sangeeta-ojha.webp
Sangeeta Ojha is a business and finance journalist with vast experience across leading media platforms, including Mint and India Today. Passionate about personal finance, she has built a reputation for covering a wide range of PF topics—from income tax and mutual funds to insurance, savings, and investing.

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