SalaryFY 2026-27
Gratuity Calculator
Compute your gratuity entitlement under the Payment of Gratuity Act 1972 and the tax-exempt portion u/s 10(10).
Your service details
Coverage under the Gratuity Act
Tax-exempt gratuity
₹5,53,846
Computed: ₹5,53,846 · Statutory cap: ₹20.00 L
Years counted
12 yrs
>6m → next year
Computed gratuity
₹5.54 L
Statutory cap
₹20.00 L
Exempt amount
₹5.54 L
Drill-down
How we calculated
(15 / 26) × Last (Basic + DA) × Completed Years = (15/26) × ₹80,000 × 12 = ₹5,53,846 Exempt = min(computed, ₹20 L) = ₹5,53,846
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Section 10(10) of the Income Tax Act caps tax-exempt gratuity at ₹20 lakh (lifetime limit, both regimes). Anything received above this is taxable as salary income.
FAQs
Frequently asked questions
When am I eligible for gratuity?+
After 5 continuous years of service with the same employer (relaxed to 4 years 240 days in some judgments). For employees covered under the Act, completed years of more than 6 months count as a full year.
What's the formula?+
If covered under the Act: (15 ÷ 26) × Last drawn (Basic + DA) × Years of completed service. If NOT covered (e.g. small establishments): (15 ÷ 30) × Average salary of last 10 months × Years (rounded down).
Is the ₹20L cap per employer or lifetime?+
Lifetime — across all employers. If you've already received gratuity in a previous job, the unutilised cap is what's left of ₹20L.
Are there other exemptions?+
Government employees enjoy full exemption. For private sector, the lower of: actual gratuity received, formula amount, or ₹20L is exempt.
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