Gratuity calculator
After 5 years on a ₹12L CTC (₹40,000/mo basic), your gratuity is ₹1,15,385 under the Payment of Gratuity Act, tax-free up to ₹20 lakh.
How it is computed
15 days of basic (+DA) per completed year, on a 26-working-day month. Service beyond 6 months rounds up to a full year in the statutory formula. The ₹20 lakh cap applies across all employers in a lifetime; amounts above it are taxable.
Frequently asked questions
(15 ÷ 26) × last drawn monthly basic (+DA) × completed years of service, under the Payment of Gratuity Act 1972. The default inputs give ₹1,15,385.
Generally no. Five continuous years of service is the threshold, waived only on death or disablement. Service beyond 6 months in the final year rounds up to a full year.
Tax-free up to ₹20 lakh across your lifetime for employees covered by the Act; amounts beyond the cap are taxed as salary.
Many companies accrue ~4.81% of basic inside CTC for gratuity. That is another reason in-hand is lower than CTC ÷ 12. Check the in-hand tool on the same inputs.