Calculate gratuity payable on separation. Auto-handles Section 10(10) exemption up to ₹20 lakh tax-free (unchanged since March 2018). Supports both covered employees (Payment of Gratuity Act 1972) and non-covered employees. Includes fixed-term employees (eligible after 1 year under the Code on Social Security, 2020, in force from 21 Nov 2025). IT Act 1961 + IT Act 2025 ready.
Per Payment of Gratuity Act 1972, with Section 10(10) tax exemption.
Minimum 5 years of continuous service. Waived for: death or disablement. Fixed-term employees: eligible after 1 year, pro rata (Code on Social Security, 2020, in force 21 Nov 2025). Some High Courts treat 4 years + 240 days of work in the fifth year as 5 years of continuous service.
Covered (Gratuity Act 1972): Establishments with 10+ employees. Formula: Last Basic+DA × 15/26 × Years. Not Covered: Smaller orgs. Formula: Avg of last 10 months Basic × 15/30 × Years (different denominator).
Covered: If 6+ months in current year → counts as +1 year (rounded up). Not covered: Only completed years counted (no rounding up). Example: 7 years 8 months = 8 years (covered) or 7 years (not covered).
Private sector: Lowest of (a) Actual gratuity received, (b) Last salary × 15/26 × years (covered) or ½ month's average salary × completed years (not covered), (c) ₹20,00,000 (limit since 29 March 2018). Amount above ₹20L is fully taxable. Govt employees: FULL amount tax-free.
Section 10(10) → Section 19 of IT Act 2025. ₹20L limit retained. Substantive provision unchanged — only section number changes for FY 2026-27 onwards.
Pay within 30 days of becoming due (last working day for retirement/resignation; date of death for death). Interest @ simple rate notified by govt if delayed. Form L is used to apply for gratuity from employer.
The calculator does the arithmetic. TaxSphere — our free case-law library, 1,184 authorities and the Act in full — has the judgments, the circulars and the statutory text for the same provision.
