Gratuity
✓ Last verified 14 Sep 2026
The short version
Gratuity is a lump-sum benefit an employer pays after 5+ years of continuous service, calculated from basic salary and tenure - tax-free up to a lifetime cap of ₹20 lakh for most private-sector employees.
See our full article on gratuity calculation and eligibility for the exact formula, the 5-year eligibility rule, and current tax exemption limits - a genuine, calculable retirement benefit worth factoring into your overall retirement planning, not an afterthought.
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