Articles / Pension and Retirement

Commutation of Pension: How Much and When It Is Restored

Central Government civil pensioners appointed on or before 31.12.2003, under the CCS (Commutation of Pension) Rules, 1981Checked against official documents on 5 Oct 2026

Short answerYou can commute up to 40% of your pension for a one-time lump sum. Apply within one year of retirement to avoid a medical examination. The lump sum is worked out from the official commutation table. The commuted part is restored after 15 years from the date your pension is first reduced.

How Much You Can Commute

You can commute up to forty percent of your pension for a lump sum. You may choose 40% or any lower percentage (CCS (Commutation of Pension) Rules 1981, Rule 5(1) and (2), PDF p. 4).
If the percentage gives a fraction of a rupee, the fraction is ignored (CCS (Commutation of Pension) Rules 1981, Rule 5(3), PDF p. 4).
If you commuted less than 40%, there is no provision to commute more later on a second occasion (DoPPW OM dated 31.10.2022, para 3, PDF p. 1).
You cannot commute while departmental or judicial proceedings under the Pension Rules are pending against you (CCS (Commutation of Pension) Rules 1981, Rule 4, PDF p. 4).

How the Lump Sum Is Calculated

The lump sum is calculated from the Table of commutation values in force on the date commutation becomes absolute (CCS (Commutation of Pension) Rules 1981, Rule 8, PDF p. 6). The Table gives the value for a pension of Re 1 per annum, by age next birthday. For example, the value is 8.287 at age 60 and 8.194 at age 61 (CCS (Commutation of Pension) Rules 1981, Table, PDF p. 36).

So: lump sum = monthly pension commuted x 12 x commutation value.

Example: basic pension Rs 50,000. You commute 40%, that is Rs 20,000 a month. Age next birthday is 61. Lump sum = 20,000 x 12 x 8.194 = Rs 19,66,560. This is a worked illustration only.

Your dearness relief is still calculated on the full pension, including the commuted part (DoPPW Handbook for Retiring Employees, para 7.1.3, PDF p. 15).

When and How to Apply

With pension papers: if you retire on superannuation, you can apply before retirement so that the commuted value is authorised with the PPO. The application must reach the Head of Office at least three months before superannuation (CCS (Commutation of Pension) Second Amendment Rules 2014, Rule 13(3) and (3B), PDF p. 10).
Form 6-A has an optional commutation item. If you want to commute after submitting Form 6-A, use Form 1-A (CCS (Pension) Amendment Rules 2024, Form 6-A, Notes 1 and 2, PDF p. 15).
After retirement, within one year: apply in Form 1. No medical examination is needed if the Head of Office receives it within one year of retirement (CCS (Commutation of Pension) Rules 1981, Rule 13(1), PDF p. 8).
After one year: you must apply afresh in Form 2 and undergo a medical examination (CCS (Commutation of Pension) Rules 1981, Rule 13(2), PDF p. 8). Form 2 is also used for compulsory retirement pension, invalid pension and compassionate allowance (CCS (Pension) Amendment Rules 2024, Form 6-A, Note 3, PDF p. 15).
If you die before superannuation, the Government has no liability to pay the commuted value applied for in advance (CCS (Commutation of Pension) Second Amendment Rules 2014, Rule 13(3B)(d), PDF p. 10).

When the Commuted Part Is Restored

The commuted amount is restored on completion of fifteen years from the date the reduction of pension became operative under Rule 6 (CCS (Commutation of Pension) Rules 1981, Rule 10A, PDF p. 7).
The reduction starts from the date you receive the commuted value, or three months after the Accounts Officer authorises it, whichever is earlier. For pension drawn through a bank, it starts from the date the bank credits the commuted value (CCS (Commutation of Pension) Rules 1981, Rule 6(1), proviso, PDF p. 5).
If commutation was paid on more than one occasion due to upward revision of pension, each amount is restored 15 years from its own date (CCS (Commutation of Pension) Rules 1981, Rule 10A, proviso, PDF p. 7).
If you die before restoration, no commuted amount is deducted from family pension. Family pension is paid in full (DoPPW OM dated 25.10.2022, para 2, PDF p. 1).

Where to Check

Read Rules 4 to 13 and the Table of the CCS (Commutation of Pension) Rules, 1981 (CCS (Commutation of Pension) Rules 1981, PDF p. 3), with the 2014 amendment (G.S.R. 355(E) dated 26.05.2014, PDF p. 9).

These rules apply to Government servants appointed on or before 31 December 2003 (CCS (Commutation of Pension) Rules 1981, Rule 2, PDF p. 3). Railway, armed forces and All India Services pensioners should check the commutation rules that apply to them.

Official Sources

Central Civil Services (Commutation of Pension) Rules, 1981 (as amended up to 06.06.2013) · Department of Pension and Pensioners' Welfare, Government of India
CCS (Commutation of Pension) Second Amendment Rules, 2014, G.S.R. 355(E) dated 26.05.2014 · Department of Pension and Pensioners' Welfare, Government of India
CCS (Pension) Amendment Rules, 2024, G.S.R. 410(E) dated 16.07.2024 (Form 6-A) · Department of Pension and Pensioners' Welfare, Government of India
DoPPW OM No. 42/15/2022-P&PW(D)/5 dated 25.10.2022: No deduction of commuted pension from family pension · Department of Pension and Pensioners' Welfare, Government of India
DoPPW OM No. 42/15/2022-P&PW(D)/6 dated 31.10.2022: Commutation of pension on more than one occasion · Department of Pension and Pensioners' Welfare, Government of India
A Handbook for Retiring Central Government Employees · Department of Pension and Pensioners' Welfare, Government of India

Have a question about your own case?

Ask the Assistant

More in Pension and Retirement

This article explains the official rules as published; it is not legal advice. Check the cited document, and your own department's orders, before acting.