Gratuity Calculator India 2026

Minimum 5 years of continuous service is required under the Payment of Gratuity Act, 1972. However, in case of death or disability, gratuity is payable irrespective of length of service. If you have 4 years and 6+ months, it's considered as 5 years.

Gratuity = (15 × Last Drawn Salary × Years of Service) / 26 for private sector, and / 30 for government employees. Last Drawn Salary = Basic + Dearness Allowance. Other allowances like HRA, conveyance are not included.

Gratuity up to ₹30 lakhs is tax-free under Section 10(10) of the Income Tax Act (increased from ₹20L in April 2026). Any amount above ₹30 lakhs is taxable as 'Income from Salary'. For government employees, entire gratuity is tax-free with no upper limit.

Yes, gratuity can be fully or partially forfeited if: (1) Services terminated for riotous or violent behavior, (2) Offense involving moral turpitude while in employment, (3) Willful damage to employer's property. The forfeiture is to the extent of damage caused.

If employer delays/refuses gratuity, employee can: (1) Apply to Controlling Authority under the Act, (2) Interest is payable for delayed payment, (3) Employer can be penalized under Section 9. Gratuity must be paid within 30 days of it becoming due.

Many companies include gratuity as part of CTC (Cost to Company). Typically calculated as 4.81% of Basic salary per year. However, actual gratuity is payable only after 5 years of service based on last drawn salary, not CTC component.

If you have worked for more than 6 months beyond complete years, it's rounded up. Example: 4 years 7 months = 5 years for calculation. But 4 years 5 months = 4 years. This rounding applies only for calculation, eligibility still requires 5 completed years.

Under the Payment of Gratuity Act, there's no maximum cap on gratuity amount. However, for tax purposes, only ₹30 lakhs is exempt (from April 2026, previously ₹20L). Any gratuity above ₹30 lakhs is taxable. Government employees have no such tax limit.