Gratuity & Leave Encashment Calculator (₹25 Lakhs Tax Free)

Calculate employee gratuity entitlement under the Payment of Gratuity Act 1972 using the 15/26 formula. View continuous 5-year service rules and the latest ₹25 Lakhs tax-exempt limit under Section 10(10).

Interactive Gratuity & Leave Encashment Calculator (₹25 Lakhs Tax Free)
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Formula & Calculation Methodology

Gratuity = (15 * Last Drawn Basic+DA * Completed Years of Service) / 26.

Step-by-Step Worked Example

Basic + DA: ₹45,000 | Completed Service: 8 Years

  1. Gratuity = (15 * 45,000 * 8) / 26
  2. Calculated Gratuity: ₹2,07,692
  3. Taxability: 100% Tax-Free under Section 10(10) (Exemption limit: ₹25 Lakhs)
Result: Payable Gratuity: ₹2,07,692 (100% Tax-Free)

Frequently Asked Questions

Is 5 years of service mandatory to claim gratuity?

Yes, under the Payment of Gratuity Act 1972, completing 5 continuous years of service with the same employer is mandatory, except in cases of death or permanent disablement.

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