Gratuity
Gratuity is a lump-sum payment to an employee on leaving after at least five years of continuous service, payable by establishments with 10 or more employees under the Payment of Gratuity Act.
Formula
Gratuity = last drawn salary × 15/26 × years of service
Example: ₹50,000 salary, 6 years → ₹1,73,077 gratuity.
Related terms
General information, not tax, legal or accounting advice. Thresholds and timelines change by notification — confirm applicability with your CA, CS, or lawyer.
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