Gratuity is paid under the Payment of Gratuity Act to an employee who has completed five years of continuous service, with exceptions such as death or disability.
The usual formula is last drawn salary (basic plus dearness allowance) times 15 times years of service, divided by 26.
For covered employees the amount is capped, currently at INR 20,00,000. Labour code changes may alter the rules, so check the current position.
You can estimate it with the free gratuity calculator.
Dates and rules change. Check the current notification or ask your adviser before relying on this page.
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