With a last basic + DA of ₹50,000 and 20 years of service, your gratuity is about ₹5,76,923 (₹50,000 × 15 ÷ 26 × 20).
Last basic + DA
₹50,000
Years of service
20
Gratuity
₹5,76,923
If service is 20 years 7 months
₹6,05,769
Tax-free part (private sector)
₹5,76,923
If your employer is not covered by the Act
Employers with fewer than 10 staff may use the 15/30 formula on completed years: ₹5,00,000 in this case.
Good to know
Permanent employees need 5 years of continuous service (not needed in case of death or disability); fixed-term employees qualify after 1 year under the new labour codes.
If basic + DA is less than half your total pay, the new codes add the extra allowances back into the gratuity base.
Up to ₹20 lakh of gratuity is tax-free for private sector employees.