What is the statutory gratuity formula in India?

For organizations covered under the Gratuity Act, the formula is: Gratuity = (15 × Last Drawn Basic Salary × Completed Years of Service) / 26.

Is gratuity tax-free in India?

Gratuity received by government employees is fully tax-exempt. For private sector employees covered under the Act, gratuity is tax-free up to a lifetime ceiling of ₹20 Lakhs.

Is the 5-year service rule strictly mandatory?

Yes, continuous service of 5 years is mandatory for gratuity eligibility upon resignation or retirement. The 5-year condition is waived only in the unfortunate event of death or permanent disability of the employee.

Gratuity Calculator

Under the Payment of Gratuity Act, 1972 in India, employees who complete at least 5 years of continuous service with an employer are legally entitled to a gratuity payout upon retirement, resignation, or termination.

Last drawn monthly salary (₹)

Years of continuous service

₹1,73,077

Estimated gratuity for 6 completed year(s) (15 days salary per year, 5+ years service).

Gratuity Calculator

Last drawn monthly salary (₹)

Years of continuous service

₹1,73,077

Estimated gratuity for 6 completed year(s) (15 days salary per year, 5+ years service).