Estimate statutory gratuity entitlement under the Indian Payment of Gratuity Act.
Result
Calculated under the Payment of Gratuity Act 1972 for covered establishments. Service over 6 months in the final year rounds up.
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Gratuity = (15 x Last Drawn Basic x Years) / 26
₹60,000 Basic, 7 completed years of service.
Estimated gratuity: ₹2,42,308 | Entirely tax-exempt under ₹20 Lakh statutory cap.
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Open calculatorUnder the Payment of Gratuity Act 1972, employees must complete at least 5 continuous years of service with the same employer to become eligible, except in cases of death or permanent disability.
The law assumes 26 working days in a month (excluding 4 Sundays), meaning 15 days of salary per year corresponds to 15/26 of a monthly wage.
For private sector employees covered under the Payment of Gratuity Act, the maximum lifetime tax-exempt gratuity cap under Section 10(10) is ₹20,00,000 (₹20 lakh).
Gratuity is a statutory monetary reward paid by an employer to employees for long-term service. If employment in the final year exceeds 6 months, Indian labor courts round the service tenure up to the next full year for gratuity calculation.