Work out the gratuity your employer owes you. Uses the 15 / 26 rule from the Payment of Gratuity Act, the part-year rounding rule, and the ₹20 lakh ceiling.
Why divide by 26 and not 30?
The Act treats a month as 26 working days, on the reasoning that the four Sundays are days off. Dividing by 26 rather than 30 makes each day of wages larger, so the rule works in your favour.
Do I need five years of service?
Usually yes. The Act asks for five years of continuous service. Death and disablement are the exceptions, and the family or the employee gets gratuity whatever the length of service. Some court rulings have read 4 years and 240 days as five years, so ask if you are close.
What counts as wages here?
Basic pay plus dearness allowance, as last drawn. HRA, bonus, overtime, and other allowances stay out. That is why gratuity often looks smaller than people expect from their CTC.
Is 6 months and 1 day enough to round up?
Yes. The Act says a part of a year "in excess of six months" counts as a whole year. Exactly six months does not round up. One extra day does, and it can be worth fifteen days of wages.
Is my gratuity tax free?
Up to a point. Section 10(10) of the Income-tax Act exempts the least of ₹20,00,000, what the Act made payable, and what you actually received. So the usual case is fully exempt, and only an employer paying more than the Act requires creates a taxable slice. That exemption is a separate rule from the Act ceiling, with its own notification.
What if my employer is not covered by the Act?
Then the 15 / 26 formula does not bind them. Smaller establishments outside the Act pay under their own policy, which is often less generous. Read your appointment letter or the employee handbook.