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7th Pay Commission Pension & Commutation Calculator

Calculate basic pension, commuted value of pension (CVP), monthly commuted pension reduction, and gratuity.

₹
%
years

Full pension needs 20 years; below that it is pro-rata.

%

Capped at 40% by rule.

years

Commutation factor 8.194 at age next birthday 61.

Full basic pension
₹33,850
50% of last basic
Commuted lump sum
₹13,31,361
40% × 12 × 8.194
Reduced monthly pension
₹20,310
−₹13,540 for 15 years
Monthly with DA
₹31,074
Incl. 53% dearness relief
Retirement gratuity
₹19,72,023
(Basic + DA) × 15/26 × half-years
Family pension — enhanced
₹33,850
50% for the first 10 years
Family pension — normal
₹20,310
30% thereafter

How this is calculated

Commutation factor is read from the CCS (Commutation of Pension) Rules table by age at next birthday, which is 61 here, giving 8.194.

Lump sum = ₹13,540 × 12 × 8.194 = ₹13,31,361

The commuted portion is restored after 15 years, after which the full pension resumes.

Dearness relief is paid on the full pension in practice; the figure above applies it to the reduced pension, which is the conservative reading.

7th Pay Commission Pension & Commutation Calculator: how it works

Basic pension is half your last basic pay. Commuting part of it gives you a lump sum now in exchange for a reduced monthly pension for fifteen years — a trade worth understanding before you sign.

How basic pension is worked out

Basic pension = 50% of last basic pay

Requires 20 years or more of qualifying service
Below 20 years, pro-rata applies

The rules allow the calculation on either your last basic pay or the average of your last ten months, whichever is more favourable. For most people the last drawn pay is higher, because pay only rises.

Dearness relief is then paid on top at the same percentage as serving employees receive DA, and it is revised twice a year.

Commutation: the trade you are making

You may commute up to 40 percent of your basic pension. In exchange you receive a lump sum now, and your monthly pension is reduced by exactly the commuted portion for fifteen years, after which the full pension is restored.

Lump sum = Commuted portion × 12 × Commutation factor

Commutation factor is read from the CCS table by age at NEXT birthday

Worked example

Worked example · Retiring at 60 with 33 years of service on ₹67,700 basic

Given

  • Last basic pay: ₹67,700
  • Qualifying service: 33 years
  • Commuting: 40%
  • Age at next birthday: 61 → factor 8.194

Working

  1. 1Basic pension = 67,700 × 50% = ₹33,850
  2. 2Commuted portion = 33,850 × 40% = ₹13,540
  3. 3Lump sum = 13,540 × 12 × 8.194 = ₹13,31,361
  4. 4Reduced pension = 33,850 − 13,540 = ₹20,310

Lump sum ₹13.31 lakh now; pension restored to ₹33,850 after 15 years.

Is commuting worth it?

Over fifteen years you forgo 13,540 × 12 × 15 = ₹24.37 lakh of pension to receive ₹13.31 lakh today. That looks like a poor deal until you account for two things: dearness relief continues to be paid on your full unreduced pension, and money today can be invested.

The implied return works out at roughly 8 to 9 percent, which is competitive with safe fixed income. Commuting makes sense if you have an immediate use for capital — clearing a housing loan, a child’s education or wedding — and less sense if the lump sum will simply sit in a savings account.

Gratuity and family pension

Retirement gratuity = (Basic + DA) × 15/26 × completed six-month periods

Subject to a ceiling of ₹25 lakh
  • Family pension is 50 percent of last basic for the first ten years after death, then 30 percent.
  • Gratuity is capped at ₹25 lakh regardless of length of service or pay.
  • Commutation does not reduce your gratuity or your family pension.

Based on

  • CCS (Pension) Rules
  • CCS (Commutation of Pension) Rules and the commutation table
  • 7th CPC recommendations on pension

Frequently asked questions

Basic pension is 50 percent of your last basic pay, provided you have 20 years or more of qualifying service. Below 20 years it is reduced pro-rata. Dearness relief is then paid on top at the prevailing rate.

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