Published on July 05, 2026 • Last updated July 05, 2026
Basic salary plus Dearness Allowance (DA) for the last month of service
Number of years of continuous employment (rounded to nearest year if service > 6 months)
Represents 15 days of salary out of 26 working days in a month
Gratuity is a lump-sum payment made by an employer to an employee as a token of appreciation for services rendered, typically after completing 5 or more years of continuous employment.
Yes, the maximum tax-exempt gratuity amount under the Payment of Gratuity Act is INR 20 Lakhs.
Generally, gratuity is only payable after completing 5 years of continuous service, except in cases of death or disablement.
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