Gratuity calculator guide
What is a Gratuity Calculator?
A Gratuity Calculator estimates the lump-sum amount an employer pays an employee for long and continuous service, usually at retirement, resignation or superannuation. You enter your last drawn monthly salary (basic pay plus dearness allowance) and your years of service. The calculator applies the statutory formula under the Payment of Gratuity Act, 1972 and shows your gratuity amount, the tax-exempt portion and the taxable balance.
Gratuity is one of the most valuable terminal benefits for salaried employees in India. It is paid in addition to provident fund, pension and leave encashment. For employees covered by the Act, the payout is calculated at 15 days’ wages for every completed year of service. The tax exemption under Section 10(10) of the Income Tax Act makes it even more valuable — up to ₹20 lakh of gratuity is tax-free for non-government employees on a lifetime basis.
The output is an estimate based on the inputs you provide. Actual payout depends on your employer’s policy, the exact salary components considered and whether your establishment is covered by the Payment of Gratuity Act.
What this calculator shows you
- Gratuity amount — the total lump sum payable based on the statutory formula.
- Tax-exempt portion — the amount exempt under Section 10(10), capped at ₹20 lakh lifetime for non-government employees.
- Taxable gratuity — any amount above the exemption limit, taxable as salary at your slab rate.
- Formula used — whether the calculation follows the 15/26 rule (covered under the Act) or the 15/30 rule (not covered).
- Years counted — completed years, with more than six months in the final year rounded up to a full year.
- Last drawn salary considered — basic pay plus dearness allowance only.
Tip: Gratuity is not the same as your CTC gratuity component. The CTC figure is a provision; the actual payout depends on your last drawn salary and completed years of service. Your gratuity can be higher or lower than the CTC provision. Always calculate the actual amount using the formula.
How to use the gratuity calculator
- Enter your last drawn monthly salary — basic pay plus dearness allowance. Do not include HRA, bonus, commission, overtime or other allowances.
- Enter your years of service. If you have served 10 years and 7 months, enter 11 years (rounded up). If you have served 10 years and 5 months, enter 10 years.
- Select whether you are covered under the Payment of Gratuity Act or not. Most private sector employees in establishments with 10 or more employees are covered.
- Select your employee category — government or non-government — to apply the correct tax exemption rules.
- Read the gratuity amount, the exempt portion and the taxable balance.
- If you are comparing job offers or planning retirement, change the years of service and salary inputs to see how the gratuity changes.
- Check the effective date of your exit to confirm the rounding rule — more than six months in the final year is rounded up.
Gratuity formula
For employees covered under the Payment of Gratuity Act:
Gratuity = (15 / 26) × Last drawn monthly salary × Years of service
- 15 — 15 days’ wages per completed year of service
- 26 — working days in a month (excluding Sundays)
- Last drawn salary — basic pay + dearness allowance
- Years of service — completed years; more than 6 months in the final year rounded up
For employees not covered under the Act:
Gratuity = (15 / 30) × Average salary of last 10 months × Completed years of service
- 15 / 30 — half a month’s salary per completed year
- Average salary — average of basic + DA for the last 10 months
- Completed years — part of a year is ignored; no rounding up
Example: An employee covered under the Act with a last drawn monthly salary of ₹50,000 (basic + DA) and 10 years of service. Gratuity = (15 / 26) × 50,000 × 10 = ₹2,88,462. If the service was 10 years and 7 months, it counts as 11 years, and the gratuity becomes (15 / 26) × 50,000 × 11 = ₹3,17,308.
Who is eligible for gratuity?
Gratuity is governed by the Payment of Gratuity Act, 1972. The Act applies to factories, mines, oilfields, plantations, ports, railway companies, and shops or establishments employing 10 or more persons[reference:0]. An employee must have rendered continuous service for not less than five years to be eligible[reference:1]. The five-year condition is waived in cases of death or permanent disablement[reference:2].
Scenario
Eligibility
Resignation after 5+ years
Eligible
Retirement or superannuation
Eligible
Resignation before 5 years
Not eligible, except in specific court-recognised cases (4 years 240 days rule)
Death of employee
Eligible regardless of years of service; paid to nominee
Permanent disablement
Eligible regardless of years of service
Fixed-term contract employees (from 21 Nov 2025)
Eligible after 1 year of service on a pro-rata basis[reference:3]
Probation period generally counts toward continuous service if the employee is subsequently confirmed. Unapproved absence, unauthorised leave and breaks in service can affect the continuous service calculation. Always check your appointment letter and company policy.
Tax exemption on gratuity under Section 10(10)
Gratuity received at retirement, resignation or death is taxable as salary, but a significant exemption is available under Section 10(10) of the Income Tax Act. The exemption depends on your employee category and whether you are covered under the Payment of Gratuity Act[reference:4].
Employee category
Exempt amount
Government employees (Central, State, local authority)
Fully exempt — entire gratuity is tax-free[reference:5]
Non-government employees covered under the Act
Least of: (a) formula amount (15/26 × salary × years), (b) ₹20,00,000, (c) gratuity actually received[reference:6]
Non-government employees not covered under the Act
Least of: (a) half month’s average salary of last 10 months × completed years, (b) ₹20,00,000, (c) gratuity actually received[reference:7]
The ₹20 lakh exemption is a lifetime cumulative limit, not a per-employer limit[reference:8]. If you have already claimed gratuity exemption from a previous employer, the remaining exemption is reduced by that amount. CBDT Circular No. 573 dated 21 August 1990 confirms this[reference:9].
Gratuity received during service (before retirement or resignation) is fully taxable[reference:10]. Gratuity received by government employees is fully exempt regardless of the amount. The exemption under Section 10(10) is available in both the old and new tax regimes[reference:11].
Tip: If your total gratuity across all employers exceeds ₹20 lakh in your lifetime, the excess is taxable at your slab rate. Plan job transitions with this in mind. If you received ₹8 lakh from a previous employer and claim the exemption, only ₹12 lakh remains exempt from your current employer.
Illustrative examples
Sample calculations. Your actual gratuity depends on your last drawn salary and completed years of service.
Last drawn salary (basic + DA)
Years of service
Gratuity (15/26)
Exempt portion
Taxable portion
₹30,000
5 years
≈ ₹86,538
Fully exempt
Nil
₹50,000
10 years
≈ ₹2,88,462
Fully exempt
Nil
₹70,000
7 years
≈ ₹2,82,692
Fully exempt
Nil
₹1,00,000
15 years
≈ ₹8,65,385
Fully exempt
Nil
₹1,50,000
20 years
≈ ₹17,30,769
Fully exempt
Nil
₹2,00,000
22 years
≈ ₹25,38,462
₹20,00,000
₹5,38,462
In the last example, the gratuity exceeds the ₹20 lakh lifetime exemption. The excess of ₹5,38,462 is added to your total income and taxed at your slab rate. For a person in the 30% bracket, the tax on the excess would be roughly ₹1,61,538 plus cess.
How to read the result
- Gratuity amount — the gross lump sum payable based on the statutory formula. This is before any tax deduction.
- Exempt portion — the amount you do not pay tax on. For most employees with less than ₹20 lakh total gratuity, this is the full amount.
- Taxable gratuity — the amount added to your income and taxed at your slab rate. Only applies if total lifetime gratuity exceeds ₹20 lakh.
- Years counted — the number used in the formula. Verify the rounding rule: more than six months in the final year is rounded up.
- Salary considered — basic pay plus dearness allowance. Other allowances are excluded, which can significantly reduce the gratuity compared with CTC-based expectations.
Gratuity vs other retirement benefits
Benefit
Who pays
Tax treatment
Gratuity
Employer
Exempt up to ₹20 lakh (non-government); fully exempt for government employees
Provident Fund (EPF)
Employer + employee contributions
Exempt if 5+ years of continuous service; EEE status
Leave encashment
Employer
Government: fully exempt; non-government: exempt up to ₹25 lakh or 10 months’ salary[reference:12]
Pension (uncommuted)
Employer / government
Fully taxable
Commuted pension
Employer / government
Government: fully exempt; non-government: 1/3 or 1/2 exempt depending on gratuity receipt[reference:13]
Gratuity is only one part of your retirement kitty. Use the Retirement Planning Calculator to see how all your benefits together shape your post-retirement income.
Common mistakes to avoid
- Including HRA and other allowances in salary. Gratuity is calculated only on basic pay plus dearness allowance. HRA, bonus, commission, overtime and perquisites are excluded.
- Assuming every job switch resets the ₹20 lakh exemption. The exemption is a lifetime cumulative cap, not a per-employer benefit.
- Rounding years incorrectly. More than six months in the final year is rounded up; six months or less is ignored. For employees not covered under the Act, no rounding applies at all.
- Forgetting the 5-year rule. Resignation before five years normally means no gratuity, unless the exit is due to death or disablement.
- Confusing CTC gratuity with actual payout. The CTC provision is an estimate. The actual gratuity depends on last drawn salary and years of service.
- Not tracking exemption claimed from previous employers. If you claimed exemption earlier, your remaining lifetime limit is reduced.
- Ignoring the 4 years 240 days rule. In certain court-recognised cases, employees with 4 years and 240 days of continuous service may be eligible for gratuity[reference:14].
- Missing the nominee details. In case of death, gratuity is paid to the nominee. Keep nominee details updated with your employer.
Frequently asked questions
What is gratuity?
Gratuity is a lump-sum payment made by an employer to an employee as a recognition of long and continuous service. It is governed by the Payment of Gratuity Act, 1972 and is typically paid at retirement, resignation, superannuation or in case of death or disablement.
How is gratuity calculated?
For employees covered under the Act, gratuity = (15 / 26) × last drawn monthly salary (basic + DA) × years of service. Years of service are completed years, with more than six months in the final year rounded up. For employees not covered, the formula is half a month’s average salary for each completed year.[reference:15]
Who is eligible for gratuity?
An employee who has completed five years of continuous service with an employer is eligible. The five-year condition is waived in cases of death or permanent disablement. Fixed-term contract employees are eligible after one year of service from 21 November 2025.[reference:16]
Is gratuity taxable?
For government employees, gratuity is fully exempt. For non-government employees, gratuity received at retirement or resignation is exempt up to ₹20 lakh lifetime under Section 10(10). Any amount above this is taxable as salary. Gratuity received during service is fully taxable.[reference:17][reference:18]
Does the ₹20 lakh exemption apply separately for each employer?
No. The ₹20 lakh exemption is a lifetime cumulative limit. If you have claimed exemption from a previous employer, the remaining limit is reduced by that amount. This is confirmed by CBDT Circular No. 573 dated 21 August 1990.[reference:19]
Can I get gratuity if I resign before 5 years?
Generally no, unless the exit is due to death or permanent disablement. In some court-recognised cases, employees with 4 years and 240 days of continuous service have been held eligible for gratuity. The 4 years 240 days rule depends on the facts of the case and judicial interpretation.[reference:20]
Is gratuity available in both old and new tax regimes?
Yes. The exemption under Section 10(10) is available in both the old and new tax regimes. The ₹20 lakh lifetime limit applies in both.[reference:21]
What salary is considered for gratuity calculation?
Last drawn basic pay plus dearness allowance. HRA, bonus, commission, overtime, and other allowances or perquisites are excluded. For employees not covered under the Act, the average salary of the last 10 months is used.[reference:22]
How does the rounding rule work for years of service?
For employees covered under the Act, if the service in the final year exceeds six months, it is rounded up to a full year. For example, 10 years and 7 months counts as 11 years; 10 years and 5 months counts as 10 years. For employees not covered under the Act, part of a year is ignored and no rounding up applies.[reference:23]
Can an employer pay more than the statutory gratuity?
Yes. An employer may choose to pay a higher amount than the statutory minimum. However, the tax exemption under Section 10(10) is still capped at ₹20 lakh for non-government employees, regardless of the actual amount paid.[reference:24]
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Checklist before you claim gratuity
- Years of service calculated correctly, with rounding applied where applicable
- Last drawn salary confirmed as basic pay + DA only
- Coverage under the Payment of Gratuity Act confirmed with employer
- Form 16 and salary slips reconciled for salary figures
- Previous gratuity exemption claimed tracked (for ₹20 lakh lifetime limit)
- Nominee details updated with employer
- Taxable portion estimated if gratuity exceeds ₹20 lakh
- Form 10E filed if claiming relief under Section 89 for arrears
- Gratuity reconciled with Form 16 and AIS before filing ITR
- Employer’s gratuity policy and trust rules read
Disclaimer: This gratuity calculator and the content on this page are for education and mathematical estimation only. They are not legal, tax, or financial advice, and they are not a guarantee of any payout. Gratuity entitlement depends on the Payment of Gratuity Act, 1972, the Code on Social Security, 2020, your employer’s policy and the exact terms of your employment. Tax treatment under Section 10(10) depends on your employee category, coverage under the Act and the current provisions of the Income-tax Act. Results depend entirely on the inputs you enter. Verify all figures with your employer, a qualified chartered accountant or a legal professional before making any decision. Harshonomics is not an employer, a tax authority, or a legal adviser.
Gratuity calculator guide
What is a Gratuity Calculator?
A Gratuity Calculator estimates the lump-sum amount an employer pays an employee for long and continuous service, usually at retirement, resignation or superannuation. You enter your last drawn monthly salary (basic pay plus dearness allowance) and your years of service. The calculator applies the statutory formula under the Payment of Gratuity Act, 1972 and shows your gratuity amount, the tax-exempt portion and the taxable balance.
Gratuity is one of the most valuable terminal benefits for salaried employees in India. It is paid in addition to provident fund, pension and leave encashment. For employees covered by the Act, the payout is calculated at 15 days’ wages for every completed year of service. The tax exemption under Section 10(10) of the Income Tax Act makes it even more valuable — up to ₹20 lakh of gratuity is tax-free for non-government employees on a lifetime basis.
The output is an estimate based on the inputs you provide. Actual payout depends on your employer’s policy, the exact salary components considered and whether your establishment is covered by the Payment of Gratuity Act.
What this calculator shows you
- Gratuity amount — the total lump sum payable based on the statutory formula.
- Tax-exempt portion — the amount exempt under Section 10(10), capped at ₹20 lakh lifetime for non-government employees.
- Taxable gratuity — any amount above the exemption limit, taxable as salary at your slab rate.
- Formula used — whether the calculation follows the 15/26 rule (covered under the Act) or the 15/30 rule (not covered).
- Years counted — completed years, with more than six months in the final year rounded up to a full year.
- Last drawn salary considered — basic pay plus dearness allowance only.
Tip: Gratuity is not the same as your CTC gratuity component. The CTC figure is a provision; the actual payout depends on your last drawn salary and completed years of service. Your gratuity can be higher or lower than the CTC provision. Always calculate the actual amount using the formula.
How to use the gratuity calculator
- Enter your last drawn monthly salary — basic pay plus dearness allowance. Do not include HRA, bonus, commission, overtime or other allowances.
- Enter your years of service. If you have served 10 years and 7 months, enter 11 years (rounded up). If you have served 10 years and 5 months, enter 10 years.
- Select whether you are covered under the Payment of Gratuity Act or not. Most private sector employees in establishments with 10 or more employees are covered.
- Select your employee category — government or non-government — to apply the correct tax exemption rules.
- Read the gratuity amount, the exempt portion and the taxable balance.
- If you are comparing job offers or planning retirement, change the years of service and salary inputs to see how the gratuity changes.
- Check the effective date of your exit to confirm the rounding rule — more than six months in the final year is rounded up.
Gratuity formula
For employees covered under the Payment of Gratuity Act:
Gratuity = (15 / 26) × Last drawn monthly salary × Years of service
- 15 — 15 days’ wages per completed year of service
- 26 — working days in a month (excluding Sundays)
- Last drawn salary — basic pay + dearness allowance
- Years of service — completed years; more than 6 months in the final year rounded up
For employees not covered under the Act:
Gratuity = (15 / 30) × Average salary of last 10 months × Completed years of service
- 15 / 30 — half a month’s salary per completed year
- Average salary — average of basic + DA for the last 10 months
- Completed years — part of a year is ignored; no rounding up
Example: An employee covered under the Act with a last drawn monthly salary of ₹50,000 (basic + DA) and 10 years of service. Gratuity = (15 / 26) × 50,000 × 10 = ₹2,88,462. If the service was 10 years and 7 months, it counts as 11 years, and the gratuity becomes (15 / 26) × 50,000 × 11 = ₹3,17,308.
Who is eligible for gratuity?
Gratuity is governed by the Payment of Gratuity Act, 1972. The Act applies to factories, mines, oilfields, plantations, ports, railway companies, and shops or establishments employing 10 or more persons[reference:0]. An employee must have rendered continuous service for not less than five years to be eligible[reference:1]. The five-year condition is waived in cases of death or permanent disablement[reference:2].
| Scenario | Eligibility |
|---|---|
| Resignation after 5+ years | Eligible |
| Retirement or superannuation | Eligible |
| Resignation before 5 years | Not eligible, except in specific court-recognised cases (4 years 240 days rule) |
| Death of employee | Eligible regardless of years of service; paid to nominee |
| Permanent disablement | Eligible regardless of years of service |
| Fixed-term contract employees (from 21 Nov 2025) | Eligible after 1 year of service on a pro-rata basis[reference:3] |
Probation period generally counts toward continuous service if the employee is subsequently confirmed. Unapproved absence, unauthorised leave and breaks in service can affect the continuous service calculation. Always check your appointment letter and company policy.
Tax exemption on gratuity under Section 10(10)
Gratuity received at retirement, resignation or death is taxable as salary, but a significant exemption is available under Section 10(10) of the Income Tax Act. The exemption depends on your employee category and whether you are covered under the Payment of Gratuity Act[reference:4].
| Employee category | Exempt amount |
|---|---|
| Government employees (Central, State, local authority) | Fully exempt — entire gratuity is tax-free[reference:5] |
| Non-government employees covered under the Act | Least of: (a) formula amount (15/26 × salary × years), (b) ₹20,00,000, (c) gratuity actually received[reference:6] |
| Non-government employees not covered under the Act | Least of: (a) half month’s average salary of last 10 months × completed years, (b) ₹20,00,000, (c) gratuity actually received[reference:7] |
The ₹20 lakh exemption is a lifetime cumulative limit, not a per-employer limit[reference:8]. If you have already claimed gratuity exemption from a previous employer, the remaining exemption is reduced by that amount. CBDT Circular No. 573 dated 21 August 1990 confirms this[reference:9].
Gratuity received during service (before retirement or resignation) is fully taxable[reference:10]. Gratuity received by government employees is fully exempt regardless of the amount. The exemption under Section 10(10) is available in both the old and new tax regimes[reference:11].
Tip: If your total gratuity across all employers exceeds ₹20 lakh in your lifetime, the excess is taxable at your slab rate. Plan job transitions with this in mind. If you received ₹8 lakh from a previous employer and claim the exemption, only ₹12 lakh remains exempt from your current employer.
Illustrative examples
Sample calculations. Your actual gratuity depends on your last drawn salary and completed years of service.
| Last drawn salary (basic + DA) | Years of service | Gratuity (15/26) | Exempt portion | Taxable portion |
|---|---|---|---|---|
| ₹30,000 | 5 years | ≈ ₹86,538 | Fully exempt | Nil |
| ₹50,000 | 10 years | ≈ ₹2,88,462 | Fully exempt | Nil |
| ₹70,000 | 7 years | ≈ ₹2,82,692 | Fully exempt | Nil |
| ₹1,00,000 | 15 years | ≈ ₹8,65,385 | Fully exempt | Nil |
| ₹1,50,000 | 20 years | ≈ ₹17,30,769 | Fully exempt | Nil |
| ₹2,00,000 | 22 years | ≈ ₹25,38,462 | ₹20,00,000 | ₹5,38,462 |
In the last example, the gratuity exceeds the ₹20 lakh lifetime exemption. The excess of ₹5,38,462 is added to your total income and taxed at your slab rate. For a person in the 30% bracket, the tax on the excess would be roughly ₹1,61,538 plus cess.
How to read the result
- Gratuity amount — the gross lump sum payable based on the statutory formula. This is before any tax deduction.
- Exempt portion — the amount you do not pay tax on. For most employees with less than ₹20 lakh total gratuity, this is the full amount.
- Taxable gratuity — the amount added to your income and taxed at your slab rate. Only applies if total lifetime gratuity exceeds ₹20 lakh.
- Years counted — the number used in the formula. Verify the rounding rule: more than six months in the final year is rounded up.
- Salary considered — basic pay plus dearness allowance. Other allowances are excluded, which can significantly reduce the gratuity compared with CTC-based expectations.
Gratuity vs other retirement benefits
| Benefit | Who pays | Tax treatment |
|---|---|---|
| Gratuity | Employer | Exempt up to ₹20 lakh (non-government); fully exempt for government employees |
| Provident Fund (EPF) | Employer + employee contributions | Exempt if 5+ years of continuous service; EEE status |
| Leave encashment | Employer | Government: fully exempt; non-government: exempt up to ₹25 lakh or 10 months’ salary[reference:12] |
| Pension (uncommuted) | Employer / government | Fully taxable |
| Commuted pension | Employer / government | Government: fully exempt; non-government: 1/3 or 1/2 exempt depending on gratuity receipt[reference:13] |
Gratuity is only one part of your retirement kitty. Use the Retirement Planning Calculator to see how all your benefits together shape your post-retirement income.
Common mistakes to avoid
- Including HRA and other allowances in salary. Gratuity is calculated only on basic pay plus dearness allowance. HRA, bonus, commission, overtime and perquisites are excluded.
- Assuming every job switch resets the ₹20 lakh exemption. The exemption is a lifetime cumulative cap, not a per-employer benefit.
- Rounding years incorrectly. More than six months in the final year is rounded up; six months or less is ignored. For employees not covered under the Act, no rounding applies at all.
- Forgetting the 5-year rule. Resignation before five years normally means no gratuity, unless the exit is due to death or disablement.
- Confusing CTC gratuity with actual payout. The CTC provision is an estimate. The actual gratuity depends on last drawn salary and years of service.
- Not tracking exemption claimed from previous employers. If you claimed exemption earlier, your remaining lifetime limit is reduced.
- Ignoring the 4 years 240 days rule. In certain court-recognised cases, employees with 4 years and 240 days of continuous service may be eligible for gratuity[reference:14].
- Missing the nominee details. In case of death, gratuity is paid to the nominee. Keep nominee details updated with your employer.
Frequently asked questions
What is gratuity?
Gratuity is a lump-sum payment made by an employer to an employee as a recognition of long and continuous service. It is governed by the Payment of Gratuity Act, 1972 and is typically paid at retirement, resignation, superannuation or in case of death or disablement.
How is gratuity calculated?
For employees covered under the Act, gratuity = (15 / 26) × last drawn monthly salary (basic + DA) × years of service. Years of service are completed years, with more than six months in the final year rounded up. For employees not covered, the formula is half a month’s average salary for each completed year.[reference:15]
Who is eligible for gratuity?
An employee who has completed five years of continuous service with an employer is eligible. The five-year condition is waived in cases of death or permanent disablement. Fixed-term contract employees are eligible after one year of service from 21 November 2025.[reference:16]
Is gratuity taxable?
For government employees, gratuity is fully exempt. For non-government employees, gratuity received at retirement or resignation is exempt up to ₹20 lakh lifetime under Section 10(10). Any amount above this is taxable as salary. Gratuity received during service is fully taxable.[reference:17][reference:18]
Does the ₹20 lakh exemption apply separately for each employer?
No. The ₹20 lakh exemption is a lifetime cumulative limit. If you have claimed exemption from a previous employer, the remaining limit is reduced by that amount. This is confirmed by CBDT Circular No. 573 dated 21 August 1990.[reference:19]
Can I get gratuity if I resign before 5 years?
Generally no, unless the exit is due to death or permanent disablement. In some court-recognised cases, employees with 4 years and 240 days of continuous service have been held eligible for gratuity. The 4 years 240 days rule depends on the facts of the case and judicial interpretation.[reference:20]
Is gratuity available in both old and new tax regimes?
Yes. The exemption under Section 10(10) is available in both the old and new tax regimes. The ₹20 lakh lifetime limit applies in both.[reference:21]
What salary is considered for gratuity calculation?
Last drawn basic pay plus dearness allowance. HRA, bonus, commission, overtime, and other allowances or perquisites are excluded. For employees not covered under the Act, the average salary of the last 10 months is used.[reference:22]
How does the rounding rule work for years of service?
For employees covered under the Act, if the service in the final year exceeds six months, it is rounded up to a full year. For example, 10 years and 7 months counts as 11 years; 10 years and 5 months counts as 10 years. For employees not covered under the Act, part of a year is ignored and no rounding up applies.[reference:23]
Can an employer pay more than the statutory gratuity?
Yes. An employer may choose to pay a higher amount than the statutory minimum. However, the tax exemption under Section 10(10) is still capped at ₹20 lakh for non-government employees, regardless of the actual amount paid.[reference:24]
Related calculators
Related guides
Checklist before you claim gratuity
- Years of service calculated correctly, with rounding applied where applicable
- Last drawn salary confirmed as basic pay + DA only
- Coverage under the Payment of Gratuity Act confirmed with employer
- Form 16 and salary slips reconciled for salary figures
- Previous gratuity exemption claimed tracked (for ₹20 lakh lifetime limit)
- Nominee details updated with employer
- Taxable portion estimated if gratuity exceeds ₹20 lakh
- Form 10E filed if claiming relief under Section 89 for arrears
- Gratuity reconciled with Form 16 and AIS before filing ITR
- Employer’s gratuity policy and trust rules read
Disclaimer: This gratuity calculator and the content on this page are for education and mathematical estimation only. They are not legal, tax, or financial advice, and they are not a guarantee of any payout. Gratuity entitlement depends on the Payment of Gratuity Act, 1972, the Code on Social Security, 2020, your employer’s policy and the exact terms of your employment. Tax treatment under Section 10(10) depends on your employee category, coverage under the Act and the current provisions of the Income-tax Act. Results depend entirely on the inputs you enter. Verify all figures with your employer, a qualified chartered accountant or a legal professional before making any decision. Harshonomics is not an employer, a tax authority, or a legal adviser.