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Official 15/26 formula under the Payment of Gratuity Act. Tax-free up to ₹20 lakh. Eligibility, rounding rules and monthly equivalent included.
Gratuity is a lump sum your employer pays for long service, calculated as (last basic + DA) × 15 × years ÷ 26 under the Payment of Gratuity Act. You're eligible after 5 continuous years, and gratuity is tax-free up to ₹20 lakh. Enter your salary and tenure above for your exact amount. Planning your take-home too? Use the CTC calculator →
INPUTS
Last year rounds up if > 6 months
GRATUITY AMOUNT
₹2,01,923
ELIGIBLEYears counted: 7
TAX BREAKDOWN
Tax-free portion (cap ₹20L)₹2,01,923
Taxable portion₹0
Monthly equivalent₹2,404
Formula used: (Basic + DA) × 15 × 7 ÷ 26 = ₹2,01,923
How gratuity is calculated in India
Under the Payment of Gratuity Act 1972, gratuity = (Basic + DA) × 15 × years of service ÷ 26 for employees of covered establishments. Non-covered employers use a 30-day month divisor instead of 26. You become eligible after completing 5 continuous years of service (the 4 years 240 days rule applies in special cases — use the “months in last year” field to handle rounding).
The first ₹20,00,000 of gratuity is fully tax-exempt under Section 10(10). Any amount above is taxable at your slab rate.
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