Gratuity Calculator
Estimate the gratuity lump sum payout you are eligible to receive upon resigning or retiring after completed years of service.
Taxability Status (Sec 10(10))
Frequently Asked Questions
What is the minimum eligibility criteria for receiving gratuity?
To be eligible for gratuity, you must have completed at least 5 years of continuous service with your current employer. This condition is waived in the unfortunate event of death or total disablement during active employment.
What is the tax exemption limit on gratuity in India?
Under Section 10(10) of the Income Tax Act, the maximum tax-free gratuity amount allowed for private-sector employees covered by the Act is capped at ₹20 Lakhs. Any amount received above this threshold is taxable.
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Gratuity in India: What You've Earned, How Much, and When You Can Claim It
Many Indian employees don't know exactly how much gratuity they're entitled to — and some lose it entirely because they resign a month before completing 5 years. Understanding the rules can mean the difference between a ₹0 and a ₹6–8 lakh payout.
Gratuity is governed by the Payment of Gratuity Act, 1972. It's payable to employees who have completed a minimum of 5 continuous years of service with the same employer. The formula is: Gratuity = (Last Basic Salary + DA) × 15/26 × Number of Years Served.
The "15/26" represents 15 days of salary for each completed year of service, where 26 is the number of working days in a month. Note that "completed years" uses a rule: a fraction of a year with more than 6 months counts as a full year.
For an employee with a ₹50,000 Basic+DA and 8 years of service: ₹50,000 × 15/26 × 8 = ₹2.3 lakhs tax-free. Gratuity up to ₹20 lakhs received from government-covered employers is fully tax-exempt.
If you're at 4.5 years, do not resign yet. Six more months unlocks your gratuity entitlement. This is one of those financial decisions where a half-year of patience is directly worth lakhs of rupees.
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