Gratuity Calculator India (Act 1972 & Sec 10(10))
100% Local Browser ProcessingPayment of Gratuity Act 1972100% Tax-Free under Income Tax Act (Exemption limit: ₹20 Lakhs).
Added to taxable salary income (amount exceeding ₹20 Lakhs limit).
Statutory Calculation Parameters
Select Employment Category
Monthly Salary Components
Note: Gratuity calculation considers Basic Salary + Dearness Allowance (DA) only. Special allowances are excluded by law.
Service Tenure Duration
Under Gratuity Act 1972, service over 6 months (7 to 11 mos) is rounded UP to 1 full year.
How to Calculate Your Statutory Gratuity & Tax Exemption
Calculate exact gratuity payouts under Indian labor laws for private and government employees.
Select Employment Category
Choose whether your organization is Covered under Payment of Gratuity Act 1972, Non-Covered Private Sector, or Government Sector.
Enter Basic Salary & DA
Input your last drawn monthly Basic Salary and Dearness Allowance (DA). (Gratuity law excludes HRA and special allowances).
Set Service Tenure & Review
Select completed years and months of continuous service to calculate total payout, tenure rounding, and Sec 10(10) tax exemption.
Gratuity Formulas & Tax Exemption Comparison Matrix
Understand how gratuity is calculated for different employment categories in India.
| Employment Category | Statutory Calculation Formula | Service Tenure Rounding | Income Tax Exemption (Sec 10(10)) |
|---|---|---|---|
| Covered under Gratuity Act 1972 | (15 × Last Basic+DA × Tenure) / 26 | Service > 6 months rounded UP to 1 full year | Tax-Free up to ₹20,00,000 (Sec 10(10)) |
| Non-Covered Private Sector | (15 × Avg Salary 10 mos × Tenure) / 30 | Completed full years only (fractional months ignored) | Tax-Free up to ₹20,00,000 (Sec 10(10)) |
| Government Sector Employees | Statutory Central/State Govt Rules | Completed 6-month qualifying service blocks | 100% Tax-Free (No Upper Cap Limit) |
Taxability Rules for Gratuity Receipts in India
Under Section 10(10) of the Income Tax Act 1961, retirement and resignation gratuity received by employees is subject to specific tax exemption limits:
Exempt up to the minimum of: (1) Actual Gratuity Received, (2) Statutory Formula Payout, or (3) Maximum Lifetime Limit of ₹20,00,000 (₹20 Lakhs).
Gratuity received by Central Government, State Government, or Local Authority employees upon retirement or resignation is 100% Tax-Free with zero monetary cap.
Any gratuity amount paid by a private employer that exceeds ₹20,00,000 is classified under "Income from Salaries" and taxed according to your applicable slab rate.
Why Use Meema Tools Gratuity Calculator?
Engineered for instant 100% in-browser statutory calculations, tenure rounding analysis, tax exemption breakdowns, and printable PDF statements.
Statutory Gratuity Act 1972 Compliance
Applies exact 15/26 and 15/30 mathematical formulas for covered and non-covered Indian establishments.
Sec 10(10) Income Tax Analysis
Calculates tax-free exemption limits (up to ₹20 Lakhs) and identifies taxable gratuity portions.
Tenure Rounding & Eligibility Alert
Automatically computes >6 months tenure rounding rules and checks 5-year continuous service eligibility.
1-Click Printable Statement
Format and print clean A4 PDF statements detailing basic salary, DA, tenure, and statutory payout.
Frequently Asked Questions
About Gratuity Payouts
Everything you need to know about the 5-year continuous service rule, 15/26 formula, and Sec 10(10) exemption limit.
100% Client-Side Privacy
All calculations execute locally in your browser memory. Zero salary details or employment records are uploaded to external servers.
For covered employees, the formula is: Gratuity = (15 × Last Drawn Basic Salary + DA × Effective Years of Service) ÷ 26. In this formula, 26 represents working days in a month, and 15 represents half a month's salary.
For employees covered under the Gratuity Act 1972, service duration of more than 6 months is rounded UP to 1 full year. For example, 7 years and 7 months is rounded up to 8 years. If the duration is 6 months or less (e.g. 7 years 5 months), it is rounded down to 7 years.
Yes! Section 4(1) of the Payment of Gratuity Act specifies that an employee must render at least 5 years of continuous service with an organization to be eligible for gratuity. The only exceptions are termination due to death or permanent disablement, where the 5-year rule is waived.
For non-government private sector employees, gratuity received is tax-free up to a maximum lifetime cap of ₹20,00,000 (₹20 Lakhs). Central and State Government employees enjoy 100% tax exemption with zero upper cap limit.
As per statutory law, only Basic Salary + Dearness Allowance (DA) are included. House Rent Allowance (HRA), special allowances, performance bonuses, and overtime pay are strictly excluded.
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