Gratuity & its Tax Exemption — s.10(10)
Two questions, one tool: what gratuity does the law say you've earned, and how much of what you actually get is tax-free.
Formula gratuity
₹3,75,000
15/26 × ₹50,000 × 13 yrs (12y 7m rounds up)
Tax-free portion
₹3,75,000
bound by the formula amount
✓ Fully exempt — nothing to add to taxable salary.
- • Government employees: gratuity is fully exempt regardless of amount.
- • The ₹20L cap is a LIFETIME limit across all employers, not per job.
- • Death gratuity to nominees is fully exempt in their hands.
- • 5 completed years of service are required to be entitled at all (waived on death/disablement).