Section 33C(f) in The Indian Post Office Rules, 1933
(f)All Flat Rate Parcels shall be delivered in accordance with the terms and conditions as may be specified by the Director General, in this behalf, and in case of loss of the flat Rate Parcel or contents thereof, the compensation payable shall be restricted to Rs. 500 or the actual value of the Flat Rate Parcel or the contents lost whichever is less.