Retirement · component
Gratuity
Gratuity received on exit is exempt up to a lifetime ceiling.
How the taxable value is determined
For employees covered by the Payment of Gratuity Act, exemption is the least of ₹20,00,000, the statutory 15/26 formula amount, or actual gratuity received.
Regime availability
- Old regime
- Available
- New regime
- Available
Documentation to keep
Employer's gratuity computation and payment advice.
Legal basis: Section 10(10), Income-tax Act
Frequently asked questions
Is gratuity taxable in India?
Gratuity received on exit is exempt up to a lifetime ceiling. For employees covered by the Payment of Gratuity Act, exemption is the least of ₹20,00,000, the statutory 15/26 formula amount, or actual gratuity received.
Does the exemption apply under the new tax regime?
Under the old regime this treatment is available; under the new regime it is available. Legal basis: Section 10(10), Income-tax Act.
What records should I keep for gratuity?
Employer's gratuity computation and payment advice.
Related tools & guides
Reflects provisions in force for FY 2026-27; verify against the latest government publications (incometax.gov.in). Information, not tax advice.