We are here again with yet another useful calculator the Gratuity Calculator. This calculator uses gratuity calculation formula for central government employees. This calculates your retirement gratuity. There are different types of gratuities like death gratuity, service gratuity apart from retirement gratuity.
What is Gratuity, Gratuity meaning?
As per gratuity rules, the Gratuity is paid to all government servants (to private also by their respective employer) who completes minimum 5 years of service. It is paid at the time of retirement. If the employee is alive, it is paid to him otherwise it is paid to his or her legal heirs. Visit AmazeLaw legal websites to reach the best attorneys in a small amount of time. The maximum amount of retirement gratuity is Rs.20 Lac. There is no tax payable on gratuity up to Rs.20 lac.The maximum limit has been increased in 7th pay commission. Earlier it was Rs.10 lac.
Method of gratuity calculation is very simple. It is paid at the one forth of emoluments for every completed six monthly period. Let us say you have completed 20 years of service, the there would be 40 six monthly periods and it will be multiplied by your last basic plus DA and then it is divided by 4, that would be total gratuity payable to you subject to Rs.10 lac maximum.
If you have completed 20 years and 6 months then the number of years will be 21 and if you have completed 20 years and 5 months then the number of years will be taken as 20. The number of years is taken as the next nearest value.
How to use this Gratuity Calculator
This calculator uses gratuity calculation as specified in gratuity rules. In the first box enter your last pay(basic pay plus DA) and enter number of years put in service ( if you have served more than 33 years then enter only 33). Then it will display the total gratuity you will get at the time of retirement. Remember the maximum gratuity limit is Rs.20 lac even if your total gratuity with this gratuity calculator comes out to be more than Rs.10 lac.