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Gratuity Calculator

Calculate gratuity amount using the 15/26 formula. See tax exemption under Section 10(10) with ₹20 lakh limit.

Gratuity Amount
₹2,88,462
Tax Exempt (max ₹20L)
₹2,88,462
Taxable Amount
₹0
Calculation
Gratuity = Last Drawn × 15/26 × Years
= ₹50,000 × 15/26 × 10
= ₹2,88,462

Frequently Asked Questions

What is gratuity?

Gratuity is a lump sum paid by the employer to an employee as a token of appreciation for services rendered. Under the Payment of Gratuity Act, it is payable to employees who have completed 5+ years of continuous service.

How is gratuity calculated?

For employees covered under the Act: Gratuity = Last drawn salary × 15/26 × Years of service. Salary includes basic + DA. For every completed year of service (months > 6 are rounded up).

What is the maximum gratuity limit?

The maximum gratuity payable under the Act is ₹20 lakh. However, employers can pay more voluntarily. The tax exemption limit under Section 10(10) is also ₹20 lakh.

Is gratuity taxable?

Gratuity received on retirement/resignation is exempt up to ₹20 lakh. For government employees, it is fully exempt. Any amount exceeding ₹20 lakh is taxable as per your slab.

What if I leave before 5 years?

Under the Act, you are not entitled to gratuity if you leave before completing 5 years. However, in case of death or disability, the 5-year condition is waived.