Result
Gratuity payable
₹230,769
- Last-drawn Basic + DA₹40,000
- Years of service10 years
- Calculated gratuityFormula: Basic × 15/26 × years₹230,769
- Statutory capPost-2018 cap on tax-exempt gratuity₹2,000,000
How to use this calculator
- Enter your last-drawn Basic + DA (monthly).
- Enter years of continuous service (min 5).
- Choose employer type (covered by Gratuity Act if 10+ employees).
- Read gratuity payable + any tax on amount above ₹20L cap.
About this tool
Gratuity is a lump-sum end-of-service benefit paid by employers to employees who complete 5+ years of continuous service — governed by Payment of Gratuity Act 1972. Formula: last-drawn Basic + DA × 15/26 × years of service (for employers with 10+ employees). Statutory tax-exempt cap: ₹20 lakh (raised from ₹10L in March 2018). Gratuity received at retirement, death, or resignation is TAX-FREE up to this cap under Section 10(10). Payment must be made within 30 days of leaving; delays trigger 10% p.a. penalty interest. Employer contribution to gratuity is often shown as part of CTC even though it's only paid on separation.
Frequently asked
Minimum 5 years of continuous service with the same employer. Exceptions: paid immediately in case of death or permanent disability (no 5-year requirement). "Continuous service" allows breaks up to 6 months but longer breaks reset the counter.
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