Gratuity Calculator & Resignation Rules | Direct Tax Exemption | Bharat Samvidhan
Calculate your gratuity payout under the Payment of Gratuity Act, 1972. Learn about the 5-year eligibility criteria and tax exemptions.
PAYMENT OF GRATUITY ACT, 1972
Gratuity Calculator & Rules
Estimate your statutory gratuity payout upon resignation or retirement, check eligibility criteria, and understand tax exemptions under Direct Tax regulations.
Input Details
Monthly Basic Salary + DA (₹)
setBasicSalary(e.target.value)}
required
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Note: Gratuity is computed only on Basic Salary and Dearness Allowance. House Rent Allowance (HRA) and other bonuses are excluded.
Total Years of Service
setYearsOfService(e.target.value)}
required
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Tip: Enter months as decimals (e.g. 5 years and 6 months = 5.5).
Calculate Gratuity
Reset
Calculation Result
Total Gratuity Payable
₹
Tax-Free Amount
₹
Taxable Excess
₹
How is this calculated?
The calculation follows the statutory formula:
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(Basic Salary + DA) * 15 * Years / 26
.
The maximum tax-exempt gratuity is capped at **₹20 Lakhs** under current direct tax rules.
Frequently Asked Questions (FAQs)
Q1: Can I get Gratuity before completing 5 years?
No, under Section 4(1) of the Act, completing 5 years is mandatory. However, under Section 4(1) second proviso, the 5-year requirement is **entirely waived** if service is terminated due to death or disablement of the employee.
Q2: What is the 240 days rule in Gratuity?
In establishments working 6 days a week, if an employee completes **240 days** of work in the 5th year of service, courts consider it a completed year, validating eligibility. For 5-day-a-week offices, the requirement is **190 days**.
Q3: Is Gratuity taxable for private employees?
Under Section 10(10) of the Income Tax Act, gratuity received up to **₹20 Lakhs** is completely exempt from income tax. Any amount received above this statutory ceiling is taxable according to your income tax slab rates.