Securing Hannav Ledger...
Securing Hannav Ledger...
Calculate gratuity online using the statutory formula: (15 × Last Drawn Salary × Years of Service) ÷ 26. Enter Basic + DA, years of service, and employer type to see gratuity amount, tax exemption (up to ₹20 lakh for private/PSU), and net payout.
Enter salary, service tenure, and employer type
Basic salary + DA (last drawn before exit)
Completed years of continuous service (minimum 5)
Covered under Payment of Gratuity Act — up to ₹20L tax-free
₹4,61,538
₹0
₹4,61,538
| Component | Amount |
|---|---|
| Last Drawn Salary (Monthly) | ₹80,000 |
| Years of Service | 10 |
| Calculated Gratuity | ₹4,61,538 |
| Gratuity Amount (Payable) | ₹4,61,538 |
| Tax-Exempt Portion | ₹4,61,538 |
| Taxable Portion | ₹0 |
| Estimated Tax | ₹0 |
| Net Amount (After Tax) | ₹4,61,538 |
Gratuity = (15 × Last Drawn Salary × Years of Service) ÷ 26Gratuity under Payment of Gratuity Act 1972. Last drawn salary = Basic + DA. Max Rs 20 lakh payable. Government gratuity fully tax-exempt.
The Payment of Gratuity Act, 1972 entitles employees to gratuity after 5 years of continuous service in establishments with 10 or more employees. Gratuity is calculated on last drawn Basic + DA. Maximum gratuity payable is Rs 20 lakh. It is paid on retirement, resignation (after 5 years), death, or disablement.
Gratuity Amount = (15 × Last Drawn Monthly Salary × Completed Years of Service) ÷ 26. Last drawn salary includes Basic and Dearness Allowance only — not HRA, bonuses, or other allowances. If the calculated amount exceeds Rs 20 lakh, it is capped at the statutory maximum.
Government employees: gratuity is fully tax-exempt under Section 10(10)(i). Private sector and PSU employees covered under the Gratuity Act: exemption up to Rs 20 lakh under Section 10(10)(ii) — the least of actual gratuity, Rs 20 lakh, or the statutory formula amount. Any excess above the exempt limit is taxed as salary income.
Private Sector: Gratuity Act applies to organizations with 10+ employees. PSU/Public Sector: Same formula and Rs 20 lakh tax exemption. Government: Same formula for calculation but entire gratuity is tax-free regardless of amount (subject to service rules).
Example 1 (Private): Salary Rs 80,000/month, 10 years service. Gratuity = (15 × 80,000 × 10) ÷ 26 = Rs 4,61,538. Fully tax-free (below Rs 20L). Net = Rs 4,61,538. | Example 2 (Private, high earner): Salary Rs 2,00,000/month, 25 years. Calculated = Rs 28,84,615 → capped at Rs 20,00,000. Tax-free = Rs 20,00,000. Net = Rs 20,00,000. | Example 3 (Government): Salary Rs 1,00,000/month, 20 years. Gratuity = Rs 11,53,846. Fully exempt. Net = Rs 11,53,846.
Gratuity Rules at a Glance
Government gratuity is fully exempt under Section 10(10)(i). Private/PSU exemption under Section 10(10)(ii).