Estimate your gratuity payout and how much of it is tax-exempt, under the Payment of Gratuity Act, 1972.
Formula: (last drawn Basic+DA × 15 × years of service) / 26, with service rounded up to the next full year once the remainder exceeds 6 months. Tax-exempt up to ₹20 lakh — a lifetime cap across all employers, not per employer.
Gratuity = (last drawn Basic + DA) × 15 × years of service ÷ 26. The 15/26 represents 15 days' wages for each completed year of service, using 26 as the standard number of working days in a month.
If the remaining period beyond your last completed year exceeds 6 months, it rounds up to the next full year. For example, 7 years and 7 months counts as 8 years; 7 years and 4 months counts as 7 years.
Gratuity is tax-exempt up to ₹20 lakh — a lifetime cap across all employers you've ever received gratuity from, not a per-employer limit. Any amount above that is taxed as salary income in the year you receive it.
Yes, under the standard rule you need 5 years of continuous service with an employer to be eligible for gratuity, except in cases of death or disablement, where the 5-year requirement is waived.