Fact-check notes
Last fact-checked: 2026-05-27
Transition rule: AY 2026-27 covers FY 2025-26 and continues under the Income-tax Act, 1961. The Income-tax Act 2025 Tax Year language applies for income earned from 1 April 2026 onward.
This Batch 12 page avoids treating future-dated payroll/form/rule changes as final filing advice. Verify the active form, notification, payroll circular or portal utility before implementation.
Gratuity calculator
Estimate gratuity for an employee covered by the Payment of Gratuity Act. Tax exemption still depends on employer type, service period and lifetime exemption already used.
Formula used for covered employees: monthly salary x 15 / 26 x completed years. Private-sector exemption cap is modelled at Rs. 20,00,000; confirm cumulative lifetime use before filing.
What this covers
Use this calculator to estimate gratuity and model exemption for covered employees. Actual tax treatment depends on employer type, service continuity and lifetime exemption already used.
- Formula for covered employees: monthly salary x 15 / 26 x completed years.
- Government and private-sector tax treatment differ.
- Private-sector exemption must consider actual amount, formula amount and monetary cap.
Who this is for
- Employee leaving after 5+ years.
- Retiring private employee.
- Payroll team checking TDS.
- CA reviewing exit settlement.
Documents and data to verify
- Last drawn salary.
- Completed service years.
- Actual gratuity amount.
- Employer type.
Common mistakes to avoid
- Counting incomplete years incorrectly.
- Ignoring 5-year rule.
- No prior gratuity tracking.
- Using wrong salary definition.
How to proceed
- Confirm the applicable year, taxpayer type, form, state and portal status before acting.
- Reconcile portal data with payslips, books, invoices, Form 16/26AS/AIS, GST returns, EPFO records or contracts.
- Prepare a written computation, filing note, checklist or response with assumptions clearly stated.
- Download acknowledgements, challans, workings and evidence after filing or submission.
FAQs
Can WorkIndex help with this?
Yes. Post the facts and documents; relevant experts can quote for filing, advisory, reconciliation, registration, appeal support or ongoing compliance.
Is this page final legal advice?
No. Use it to prepare. A professional should verify the active law year, notification, portal utility and records before filing or taking a tax position.
What should I mention while posting?
Mention the year, state, form, deadline, amount involved, documents available, portal status and whether you need filing, correction, advisory or representation.