Gratuity Calculator India
Estimate gratuity from last drawn basic plus DA and service years.
Estimated Gratuity
₹1,44,231
Formula used: Basic + DA x 15 x completed years / 26. Actual payout can depend on eligibility, employer policy, and statutory limits.
Frequently Asked Questions (FAQs)
What is the formula for calculating gratuity under the Payment of Gratuity Act, 1972?
For employees covered under the Act: Gratuity = (15 × Last Drawn Basic + DA × Completed Years of Service) / 26. If service exceeds 6 months in the final year (e.g. 5 years 7 months), it is rounded up to 6 years.
Is 5 years of continuous service mandatory to receive gratuity?
Yes, under Section 4(1) of the Payment of Gratuity Act, a minimum of 5 years of continuous service is mandatory, except in cases of death or total disablement of the employee where the 5-year condition is waived.
What is the maximum tax-free gratuity exemption limit?
Under Section 10(10) of the Income Tax Act, cumulative gratuity received by private sector employees is tax-exempt up to a statutory lifetime limit of ₹20 Lakh. For government employees, the entire gratuity is 100% tax-free.
Can an employer deduct gratuity monthly from CTC?
Many Indian companies include gratuity as a line item in the annual CTC offer letter (usually ~4.81% of basic salary) as an employer benefit provision, even though it is payable only upon completing 5 years at exit.
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