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Gratuity Calculator

Calculate your gratuity amount based on last drawn salary and years of service.

Employee Details

₹10,000₹5,00,000
₹0₹2,00,000
DA if applicable (usually for government employees)
1 Year40 Years
Minimum 5 years required for gratuity eligibility

Eligibility

Minimum 5 years of continuous service required

Tax-Free Limit

Gratuity up to ₹20 lakh is tax-free

Gratuity Calculation

Total Gratuity Amount ₹2,30,769
Last Drawn Salary ₹60,000
Years of Service 10 Years
Tax Status Tax-Free

Eligibility Status

Eligible for Gratuity
You have completed the minimum required 5 years of service.

About Gratuity

What is Gratuity?

Gratuity is a monetary benefit paid by an employer to an employee as a token of appreciation for services rendered. It's governed by the Payment of Gratuity Act, 1972.

Gratuity Formula

Gratuity = (Last Salary × Years of Service × 15) / 26

Last Salary = Basic + DA
26 = Working days in a month (for private sector)
30 = Days in a month (for government employees)

Eligibility Criteria

  • Minimum 5 years of continuous service
  • Applicable on resignation, retirement, or death
  • Partial years counted if more than 6 months
  • Available to all employees in organizations with 10+ employees

Tax Implications

  • Government Employees: Fully exempt from tax
  • Private Sector: Exempt up to ₹20 lakh
  • Amount above ₹20 lakh is taxable
  • Reported under "Salary" head in ITR

Payment Timeline

  • Must be paid within 30 days of eligibility
  • If delayed, employer pays interest
  • Can be claimed within 90 days of employment termination
  • Nominee can claim in case of employee's death

Important Points

  • Maximum gratuity: ₹20 lakh (as per latest amendment)
  • Forfeiture possible in case of misconduct
  • Leave encashment is separate from gratuity
  • PF, pension, and gratuity are different benefits