India me gratuity ka complete Hinglish guide — Payment of Gratuity Act 1972 formula, ₹20 lakh tax-free cap, 5 saal eligibility rule, aur worked examples.
Gratuity = (Last drawn Basic + DA) × 15 × Years of Service ÷ 26
(Covered employers — 10+ employees ke liye. Uncovered ke liye denominator 30 hota hai instead of 26 — kareeb 13% kam gratuity.) Tax-free up to ₹20 lakh cumulative lifetime cap Section 10(10).
Scenario: Last drawn Basic + DA ₹60,000/month, completed years of service 15, employer covered under Payment of Gratuity Act.
| Basic + DA per month | ₹60,000 |
| × 15 (multiplier) | ₹9,00,000 |
| × 15 years of service | ₹1,35,00,000 |
| ÷ 26 (denominator) | ₹5,19,231 |
| Gratuity payable | ₹5,19,231 |
| Tax-free portion (under ₹20L cap) | ₹5,19,231 |
| Taxable portion | ₹0 |
| Basic + DA | 5 yrs | 10 yrs | 15 yrs | 20 yrs | 25 yrs |
|---|---|---|---|---|---|
| ₹20,000 | ₹57,692 | ₹1.15 L | ₹1.73 L | ₹2.31 L | ₹2.88 L |
| ₹30,000 | ₹86,538 | ₹1.73 L | ₹2.60 L | ₹3.46 L | ₹4.33 L |
| ₹50,000 | ₹1.44 L | ₹2.88 L | ₹4.33 L | ₹5.77 L | ₹7.21 L |
| ₹75,000 | ₹2.16 L | ₹4.33 L | ₹6.49 L | ₹8.65 L | ₹10.82 L |
| ₹1.00 L | ₹2.88 L | ₹5.77 L | ₹8.65 L | ₹11.54 L | ₹14.42 L |
| ₹1.50 L | ₹4.33 L | ₹8.65 L | ₹12.98 L | ₹17.31 L | ₹21.63 L |
Sab figures ₹20 lakh tax-free cap ke neeche hain except higher salary + longer tenure combos. Excess of ₹20L taxable hota hai slab rates par.
Gratuity + EPF + PPF + NPS — sab ek jagah track karo. Felix project karta hai retirement corpus age 60 par + tax implications calculate karta hai.
Download Richify — FreeGratuity ek lump sum payment hoti hai jo employer apne employee ko deta hai service ke khatm hone par — retirement, resignation (after 5+ years), death, ya disability. Payment of Gratuity Act 1972 ke under regulate hoti hai. Eligibility: continuous 5 saal ki service zaroori hai (death / disability me waive). Applicable factories, mines, oilfields, plantations, ports, railway, shops, aur establishments par jaha 10+ employees hain. Working journalists, port workers, plantation workers, mine workers — sab covered hain. Service continuous honi chahiye Section 2A ke under — sickness, accident, leave, lockout employee ki fault na ho to continuity break nahi hoti.
Covered employees ke liye (employers with 10+ employees, Payment of Gratuity Act applies): Gratuity = (Last drawn Basic + DA) × 15 × completed years ÷ 26. Denominator 26 average working days/month represent karta hai. Example: last basic+DA ₹60,000/month, 15 saal ki service: 60,000 × 15 × 15 ÷ 26 = ₹5,19,231. Uncovered employees ke liye (small employers < 10 employees): Gratuity = (Basic + DA) × 15 × completed years ÷ 30. Denominator 30 hota hai — covered se ~13% kam hota hai. Calculator: /in/tools/gratuity-calculator.
Mostly yes — exceptions: (1) Death ya disability: full service length regardless of payment, nominee ya heirs ko milta hai. (2) Madras High Court ke Mettur Beardsell ruling (uphold kiya gaya doosre HCs me): 4 years aur 240 days bhi qualify karte hain gratuity ke liye — last partial year ko completed treat karte hain. Lekin employers commonly strict 5-year statutory text enforce karte hain. Agar 4yrs 240days aur 5yrs ke beech deny ho jata hai, employee Section 7 ke under claim file kar sakta hai Controlling Authority ke saath.
₹20 lakh tak FULLY TAX-FREE — Income Tax Section 10(10) ke under cumulative lifetime cap across all employers (raised from ₹10L to ₹20L via Payment of Gratuity Amendment Act 2018). ₹20 lakh se zyada wala portion slab rates par taxable 'income from salary' as in the year of receipt. Government employees (Central/State, including PSU) ko UNLIMITED gratuity tax-free milti hai — koi cap nahi. Private sector me ₹20L tak fully exempt, baaki taxable. For private covered employees: least of (a) actual gratuity received, (b) ₹20L, (c) formula amount (15/26 × Basic+DA × years) tax-free; balance taxable.
Sirf Basic Salary + Dearness Allowance (DA) par. NOT CTC, HRA, bonus, overtime, leave encashment, commissions, ya koi aur allowances. Yeh ek common misunderstanding hai — employees apne CTC ko dekh ke assume karte hain ki 15/26 multiplier full CTC par lagta hai — galat hai. 'Salary' for gratuity = Last drawn (Basic + DA). Private employees ke liye jahan DA uncommon hai, gratuity effectively 15/26 × Basic × years hoti hai. To zyada Basic-to-allowances ratio = zyada gratuity. Tax planning tip: agar aap retirement ke kareeb ho, employer se basic increase request karna gratuity boost kar sakta hai (HRA exemption bhi badhta hai purane regime me).
COVERED employees ke liye: last year me 6 months ya zyada ki service hai to FULL YEAR mana jata hai — UP round hota hai. 6 months se kam ho to DOWN round. So 10 years 7 months = 11 years for formula; 10 years 5 months = 10 years. UNCOVERED employees ke liye: sirf fully completed years count hote hain — no rounding. So 10 years 11 months bhi 10 years hi count hoga. Yeh rounding rule matters: ₹60,000 Basic+DA par 10 vs 11 years ka difference ₹34,615 hota hai. Even one extra month past the 6-month threshold in the final year = entire year credit.
Gratuity payable hoti hai: (1) Superannuation / retirement par, (2) 5+ years continuous service ke baad resignation par, (3) Death par (no service requirement — nominee ko paid), (4) Disablement due to accident / disease par. Employer ko 30 days ke andar pay karna hota hai (Section 7) — fail hone par 10% per annum simple interest accrue hota hai. Agar resign karne ke baad employer delay ya refuse karta hai, Section 7 ke under claim file karo Controlling Authority ke saath. Employee can also approach Labour Commissioner's office. Death case me nominee ko payment within 30 days, succession certificate required if no nominee filed during service.
Payment of Gratuity Act formula ke under: 50,000 × 15 × 5 ÷ 26 = ₹1,44,231. Fully tax-exempt kyunki ₹20 lakh cap se kaafi kam hai. ₹50,000 par 10 years: ₹2,88,462. ₹50,000 par 20 years: ₹5,76,923. Formula linearly scale karta hai dono Basic aur years me — double ho dono me, double gratuity. ₹75,000 par 15 years: ₹6,49,038. ₹1 lakh par 20 years: ₹11,53,846. ₹1.5 lakh par 25 years: ₹21,63,461 (yahan ₹20L cap kick karta hai — excess taxable). Use /in/tools/gratuity-calculator apni specific situation model karne ke liye.
Haan — gratuity tax exemption Section 10(10) BOTH naye aur purane regime me available hai. Yeh kuch limited deductions / exemptions me se ek hai jo naye regime me bhi preserved hain — gratuity, leave encashment (Section 10(10AA)), VRS payment (Section 10(10C)), employer NPS contribution 80CCD(2), commuted pension 10(10A) — sab naye regime me available. HRA, 80C, 80D vagairah NAHI milti naye regime me — yeh distinction important hai retirement planning ke time. ₹20L gratuity cap hi cumulative lifetime hai across employers — naye / purane regime me alag-alag nahi hota.