Frequently asked questions

Gratuity is normally payable after 5 continuous years of service. But courts have held that if you complete 240 working days in your 5th year (190 days for mining), you're treated as having finished 5 years — so you can still qualify just short of the full 5.

For covered employers, any part-year over 6 months rounds up to a full year. So 6 years 7 months counts as 7 years — but 6 years 5 months stays at 6 years.

Only Basic Salary + Dearness Allowance, plus sales commission if it's a fixed percentage of turnover. HRA, bonuses, overtime, and other allowances don't count, even if they're part of your CTC.

Government employees: fully exempt, no limit. Private sector: exempt up to the lowest of three numbers — your actual gratuity, the statutory cap of ₹20,00,000, or the amount from the formula. Anything above that is taxed as regular income.

Yes. If employment ends due to death or disablement from accident or illness, the 5-year requirement doesn't apply. In case of death, the gratuity goes to your nominee or legal heirs.

Two changes matter here. First, Basic + DA must now be at least 50% of your total CTC — if your allowances push it below that, the difference gets added back into your gratuity wage base. Second, fixed-term employees can now get pro-rata gratuity after just 1 year, without needing the full 5.