Back to Tools Hub*payment of gratuity act 1972 & section 10(10) statutory formula*

Gratuity & Tax Exemption Calculator

Calculate employee statutory gratuity entitlements and compute tax-exempt amounts up to the ₹20,00,000 statutory ceiling under Section 10(10) of the Income Tax Act.

100% Free Public UtilityStatutory 15/26 Formula₹20 Lakhs Tax-Free Ceiling

Employee Salary & Service Inputs

Gratuity is computed strictly on Basic + DA (excluding HRA, bonus, or special allowances).
If service exceeds 6 months in the final year, round up to the next full year.
Mandatory for any establishment with 10 or more employees on any day in the preceding 12 months.

Gratuity Entitlement Summary

Total Gratuity Entitlement
₹ 2,62,500
5-Year Eligibility CriteriaEligible (Completed >= 5 Years) ✓
Tax-Exempt Portion (Sec 10(10))₹ 2,62,500
Taxable Gratuity Portion₹ 0

Your calculated gratuity is within the statutory ₹20 Lakhs tax exemption cap under Section 10(10).

Payment of Gratuity Act, 1972 — Statutory Provisions

15/26 Calculation Rule: For establishments covered by the Act, gratuity is calculated at the rate of 15 days' wages for every completed year of service, where a month is statutorily treated as consisting of 26 working days.

Section 10(10) Tax Exemption: Gratuity received by government employees is 100% tax-exempt. For private-sector employees covered by the Act, the least of: (a) Actual gratuity received, (b) Statutory calculated amount, or (c) The Government limit of ₹20,00,000 is exempt from income tax.