Calculate your gratuity amount under the Payment of Gratuity Act, 1972. Gratuity is tax-free up to ₹20 lakh.
Calculated Gratuity
₹0
Tax-Free Amount (up to ₹20L)
₹0
Taxable Amount (if any)
₹0
Gratuity is calculated based on your last drawn salary and years of service:
Gratuity = (Last Drawn Salary × 15 × Years of Service) / 26
Gratuity = (Last Drawn Salary × 15 × Years of Service) / 30
Gratuity is tax-free up to ₹20 lakh under Section 10(10) of the Income Tax Act. Amount above ₹20 lakh is taxable.
Gratuity is a statutory benefit calculated based on your last drawn salary and years of continuous service. The formula mathematically isolates your basic pay and dearness allowance over a 15-day equivalent per year.
Gratuity acts as a forced loyalty bonus. Understanding the tenure requirements is crucial before making career transitions.
The Myth
"My entire CTC is used to calculate my gratuity payout."
The Fact
Only your Basic Pay and Dearness Allowance are factored into the statutory formula, which is why employers often heavily weight allowances in the CTC.
Yes, this Gratuity Calculator uses standard financial algorithms to provide highly accurate long-term projections. However, always consult with a certified financial planner before making major investment decisions.
Small, consistent adjustments to your principal or compounding frequency often yield exponentially better results over time. Use this tool to model different scenarios.
This calculator provides the pure mathematical output. You must manually account for taxes, inflation, and platform fees depending on your specific financial institution.