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Home > Income Tax > Help Center > Gratuity Calculator Last Updated: Sep 03rd 2024

Gratuity Calculator

Gratuity is a voluntary payment made by an employer in appreciation of the services provided by the employee. Use EZTax gratuity calculator to calculate gratuity and Tax on gratuity.

Most Public Sector, Central and State Government, Civil Service, and certain local authority employees can get the gratuity after leaving under specific conditions. Gratuity is taxable and available to employees with 5 years of continuous service.


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   Gratuity Calculator
Assessment Year
(Assessment year in which gratuity received)
Type of Employment
(Select among Central / State / Civil Services / Local and Private Sector Employees)

Central and State Government, Civil Service, and certain local authority employees will get exemption for the amount received in the form of Gratuity. Section 10(10) of Income Tax Act 1961 covers the Gratuity. Other Employees (like 'Private Employees') get their Gratuity Exemption Amount based on the amount of gratuity received from the employer.
Amount of Gratuity received
(received from the employer; max of Rs. 20 Lakhs)

Gratuity received must be zero or more.

Maximum permitted Gratuity is restricted to Rs. 20 Lakhs.

Expected Gratuity based on the basic salary and years of service : {{expectedGratuity.toLocaleString("en-IN")}}

Time of gratuity withdrawn
Covered under payment of Gratuity Act
Average Monthly Salary
(consider Salary + DA only; this is typically 40% to 60% of Gross Salary)

Salary must be more than zero.

Years of Service (Min 5 yrs)
Number of years of continuous service.

* You need to have a minimum of 5 years of continuous employment and the company must be registered under the Payment of Gratuity Act, 1972

Gratuity Received (A)
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Gratuity Exempted (B)
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Gratuity Exempted (B)
{{ result.toLocaleString("en-IN") }} *
Taxable Gratuity (A—B)
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Frequently asked Questions

1. What is Gratuity?

If the employer has more than 10 employees, on any day of the preceding twelve months, gratuity is applicable, and is a lump sum payment to employees with five or more years of service.

All employees now receive gratuity upon resignation or retirement. It is a voluntary contribution made by an employer to appreciate employee services.

2. Does the Income tax Act provide any exemption to the employees who have received Gratuity?

The employees will get exemption for the amount received in the form of Gratuity. Section 10(10) of Income Tax Act 1961 covers the Gratuity.

3. Who are the employees covered under Gratuity?

The following employees are covered under Gratuity.

  1. Employees of Central Government or Members of civil services or Local authority employees
  2. Other Employees (Non-Government / Private Sector Employees): This covers the employees covered by Payment of Gratuity Act, 1972 and not covered by Payment of Gratuity Act, 1972.
4. I have received gratuity during the period of my service. Is it Exempt?

No, the gratuity received during the period of the service is taxable.

Gratuity received at the time of resignation or retirement is exempt. Excess amount in addition to qualified gratuity amount is fully taxable at slab rates.

5. I have opted for New Tax Regime. Can I get an exemption for gratuity received?

Yes, you can claim exemption for Gratuity u/s 10(10) under Old and New Tax Regime. There is no restriction.


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Disclaimer: This article provides an overview and general guidance, not exhaustive for brevity. Please refer Income Tax Act, GST Act, Companies Act and other tax compliance acts, Rules, and Notifications for details.