Retirement
Gratuity Calculator
Gratuity is a lump-sum reward employers pay employees who complete 5+ years of service. Tax-free up to ₹20 lakh under Sec 10(10).
Inputs
₹
₹10.0 K₹5.00 L
yr
0 yr40 yr
Gratuity payable
You'll receive
₹4,61,538
Tax-free up to ₹20 lakh lifetime cap (Sec 10(10))
Formula
(Monthly Salary × 15 × Years) / 26(₹80,000 × 15 × 10) ÷ 26 = ₹4,61,538
Quick rules
- • Minimum 5 years continuous service required
- • Last drawn salary = basic + DA (not CTC)
- • 26 = working days in a month (statutory divisor)
- • Tax-free up to ₹20 lakh lifetime (Sec 10(10))
- • Death/disability waives the 5-year requirement
When is gratuity paid?
- • On retirement / superannuation
- • On resignation after 5+ years
- • On death or permanent disability (no minimum service required)
- • On termination (excluding misconduct)
Tax treatment
For employees covered under Payment of Gratuity Act, the lower of these is tax-free under Sec 10(10):
- 1. Actual gratuity received
- 2. ₹20 lakh (lifetime cap across all employers)
- 3. (Last drawn salary × 15 × completed years) ÷ 26
Government employees get fully tax-free gratuity, no cap.