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Section 19(1) Table Sl. 3–6Payment of Gratuity Act 1972Act No. 30 of 2025

Gratuity & Retirement Tax Exemption Engine

Compute statutory gratuity eligibility under the 15/26 days formula, evaluate the 3-limit tax exemption matrix, and benchmark against the ₹20,00,000 statutory ceiling.

Statutory Cap: ₹20,00,000
Select Employment Benchmark Preset
1. Service TenureEffective Statutory Tenure: 13 Years
12 Years
7 Months
Covered under Act: Service over 6 months is rounded UP to the next full year (e.g. 12y 7m = 13y).
2. Salary & Gratuity Particulars
₹1,20,000
₹10,00,000

Gratuity Tax Exemption

Sec 19(1) Table
Tax-Exempt Gratuity
₹9,00,000
Statutory cap of ₹20,00,000 applied
Statutory Formula Gratuity15/26 × ₹120,000 × 13y
₹9,00,000
Total Gratuity ReceivedFrom employer payout
₹10,00,000
Less: Exempt (Sec 19(1))Least of 3 statutory limits
- ₹9,00,000
Taxable GratuityAdded to Gross Total Income
₹1,00,000
Estimated Tax on GratuityAt 30% bracket + 4% cess
₹31,200
Governing Rule:Clause 3: Statutory Formula (15/26 days formula)
WhatsApp CA Partner for Section 89 Relief

Section 19(1) Table 3-Limit Matrix

1. Actual Gratuity Received₹10,00,000
2. Statutory Ceiling Limit₹20,00,000
Max lifetime cap ₹20 Lakhs
3. Statutory Formula Limit₹9,00,000
15/26 × Salary × Tenure
The lowest of the three amounts is granted as full statutory tax exemption.

Chartered Accountant Statutory Advisory & Compliance Notes (Act 2025)

Section 89 Tax Relief (Form 10E)

If a substantial taxable gratuity pushes you into a higher income tax bracket in the year of separation, you can claim tax relief under Section 89 by submitting online Form 10E on the e-filing portal before filing your return.

Statutory Cap of ₹20,00,000

Under Section 19(1) Table Sl. 4–5, the maximum cumulative lifetime tax exemption for non-government employees is capped at ₹20,00,000. If exemption was claimed in an earlier employment, the remaining balance limit applies.

Payment of Gratuity Act 5-Year Rule

Under Section 4(1) of the Payment of Gratuity Act 1972, an employee becomes eligible for gratuity only upon completing at least 5 continuous years of service, except in case of death or total disablement.

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