Gratuity Calculator
Calculate your gratuity amount based on salary and years of service. Know tax-free limits and eligibility.
Gratuity Calculator
📖 GuidePrivate: Gratuity = (Basic Salary × 15 × Years) / 26
Eligible only after completing 5 years of continuous service. Tax-free limit: ₹20,00,000.
Understanding Gratuity in India
What is Gratuity?
Gratuity is a lump-sum benefit paid by employers to employees as a token of appreciation for their services. It is governed by the Payment of Gratuity Act, 1972 and is calculated based on the last drawn salary and years of service.
Eligibility (5 Year Rule)
An employee must complete at least 5 years of continuous service with the same employer to be eligible for gratuity. The only exceptions are death or disability, where the 5-year rule is waived.
Tax Exemption on Gratuity
For private sector employees, gratuity up to ₹20 lakh is exempt from income tax under Section 10(10). For government employees, the entire gratuity amount is tax-free. Any amount exceeding ₹20 lakh (for private employees) is taxable as per the individual's income tax slab.