India Gratuity Calculator (Payment of Gratuity Act 1972)
Determine statutory terminal compensation under Indian labor law with the official 15/26 formula and tax exemption thresholds.
Direct Statutory Calculation Result
Calculation Parameters (Finance Act 2024, GST Council & Central Acts)
Statutory Itemized Breakdown
| Statutory Element | Assessed Value | Legal Reference & Notes |
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Frequently Asked Statutory Questions
What is the minimum eligibility service for gratuity in India?
Under Section 4(1) of the Payment of Gratuity Act 1972, an employee is eligible for gratuity upon rendering continuous service of at least 5 years with the same employer. However, under judicial rulings, service of 4 years and 240 days in the 5th year qualifies.
What is the statutory gratuity formula for covered establishments?
For employees covered under the Act: Gratuity = (15 × Last Drawn Basic + DA × Completed Tenure Years) ÷ 26. A month is legally treated 26 working days.
How are fractional years rounded under the Gratuity Act?
If the additional months worked in the final year exceed 6 months (e.g. 7 years and 7 months), it is rounded UP to the next full year (8 years). If 6 months or less, it is rounded down.
What is the maximum tax-free gratuity limit under Section 10(10)?
Under Section 10(10) of the Income Tax Act, the statutory ceiling for tax-free gratuity for private sector employees is ₹20,00,000 (Twenty Lakh Rupees). Central and state government employees enjoy 100% tax exemption without limit.
Within what time frame must gratuity be paid upon termination?
Under Section 7(3) of the Act, the employer must arrange payment of gratuity within 30 days from the date it becomes payable. If delayed beyond 30 days, the employer must pay simple interest from the due date.
Engr. Muhammad Shahzad
Verified Fiscal & Statutory AlgorithmistLead software architect and statutory modeling specialist with over a decade of experience designing enterprise-grade algorithmic frameworks, double-entry financial models, and statutory compliance engines across European and global regulatory jurisdictions.
Engr. Muhammad Shahzad
Principal Financial Systems Architect & Indian CBDT & EPFO Statutory Systems Principal Architect
Lead software and systems architect specializing in high-performance browser computing, algorithmic validation, financial models, and zero-telemetry client-side privacy architecture.