How we calculate

Last checked 22 October 2026

Pension rules follow the CCS (Pension) Rules, 2021 and the orders listed below. Every 8th Pay Commission figure is a projection, because the Commission has not reported yet.

Pension today

• Pension is 50% of last basic pay once qualifying service is 10 years or more.
• Dearness Relief is the latest announced rate on basic pension plus any additional pension.
• Additional pension: 20% of basic pension at 80, 30% at 85, 40% at 90, 50% at 95 and 100% at 100.
• Commutation: up to 40% of basic pension; lump sum = commuted amount × 12 × the factor for your age next birthday; restored after 15 years.
• Gratuity: ¼ of basic pay + DA for each completed six months of qualifying service (3 months or more counts as six), at most 16½ times, capped at ₹25 lakh.
• UPS: 50% of the last 12 months' average basic pay at 25 years, in proportion from 10 years, at least ₹10,000 a month.

The 8th CPC projection for pensions

• Basic pension × fitment factor, as at the 7th CPC (2.57).
• We assume the ₹9,000 minimum and ₹1,25,000 maximum rise by the same factor, rounded up to the next ₹100. This is not decided.
• DR restarts at 0%, then rises every six months with prices. The commutation cut stays the same rupee amount.
• Pension arrears are the monthly difference from the effective date to the month the new pension starts.

What we do not model

Income tax on pension, the ₹1,000 Fixed Medical Allowance, NPS annuities, and any change the 8th CPC may make to pension rules. Your pension will follow the Government's orders.

Sources

• Pension, family pension, additional pension and gratuity rules: CCS (Pension) Rules, 2021, G.S.R. 868(E), rules 44 and 50 (DoPPW book) (20 December 2021)
• Gratuity ceiling of ₹25 lakh from 1 January 2024: DoPPW OM No. 28/03/2024-P&PW(B)/Gratuity/9559 (DoPPW compendium, p.113) (30 May 2024)
• Commutation factor table: Rajya Sabha unstarred question 430 (DoPPW) (22 July 2021)
• Unified Pension Scheme: DFS notification F. No. FX-1/3/2024-PR (Gazette) (24 January 2025)
• UPS payout formula and conditions: PFRDA (Operationalisation of UPS under NPS) Regulations, 2025 (19 March 2025)
• How pensions are revised: Lok Sabha unstarred question 1605 (9 February 2026)
• Current DA and DR (60%): PIB release 2253245; DoE OM 1/1(i)/2026-E.II(B) (18 and 22 April 2026)
• DA history: Department of Expenditure DA orders
• 7th CPC pay matrix, fitment factor 2.57 and precedent: Report of the 7th Central Pay Commission (19 November 2015)
• 8th CPC constitution and terms: Department of Expenditure Resolution F. No. 01-01/2025-E.III(A), Gazette of India (3 November 2025)
• Income tax for tax year 2026-27: Income-tax Act, 2025 (Gazette) and Finance Bill 2026 memorandum (1 February 2026)