The ET GenAI Hackathon 2026 has announced the results of its Idea Submission phase, with the shortlist finalised after evaluating entries from more than 54,000 builders across India. Shortlisted teams now advance to the Prototype Development Phase
The fast-expanding war between the United States, Israel, and Iran has captured global attention largely because it is disrupting oil and gas supplies from the Persian Gulf. Yet another resource is now emerging as far more critical to the survival of the region’s societies. Water
Indian technology stocks have seen an unprecedented rout over the past few weeks over fears of artificial intelligence upending the traditional outsourcing model that powers the country's $300bn (£223bn) back-office industry. The sell-off - part of a global correction in traditional software and
The ruling Bharatiya Janata Party-led National Democratic Alliance (NDA) on Monday managed an easy victory in the biennial polls to five Rajya Sabha seats in Bihar, with its candidates including Chief Minister Nitish Kumar and BJP national president Nitin Nabin
Star Brazilian forward Neymar didn’t receive a call-up to the national team squad for the upcoming friendlies against France and Croatia, although striker Endrick found a spot. With this snub, Neymar’s hopes of playing at the upcoming FIFA World Cup have received a massive blow
What Is Gratuity & How Is It Calculated Under Indian Law?
What Is Gratuity & How Is It Calculated Under Indian Law?
What Is Gratuity & How Is It Calculated Under Indian Law?
The Payment of Gratuity Act 1972 provides a financial reward for employees after five years of service in India.
Published on: Mar 03, 2026 11:53 AM IST By Genesis Share via Copy link Gratuity functions as a financial award which employers give to workers after they complete long periods of service. The organisation pays this amount when an employee departs, either through retirement or resignation or termination. The Payment of Gratuity Act 1972 establishes the legal framework for gratuity payments in India. The Act makes sure that employees receive this benefit if they worked with the employer for a certain period of time. What Is Gratuity & How Is It Calculated Under Indian Law? Gratuity works as a legal right which requires employers to make payments to staff members who fulfil the necessary conditions. The law applies to businesses that employ more than ten workers, thus creating a financial safety net for employees who choose to leave their jobs.Eligibility for Gratuity
The Indian legal system does not provide gratuity benefits to all employees. Employees must fulfil specific requirements to become eligible for the programme. Service Period The employee must have completed at least five years of continuous service with the employer. Employees who leave before completing five years of service lose their right to gratuity payment unless their departure results from death or permanent disability. Employees who exit through retirement or resignation or termination or business closure become eligible for gratuity payment. Exclusion Employees who have worked for less than five years or who leave voluntarily before completing this period are generally not eligible for gratuity. Gratuity payments become available for employees who leave their job because of death or disability.How Gratuity Is Calculated
You can calculate gratuity using gratuity calculator. The formula for determining an employee's gratuity amount uses the last salary and total work duration. The following formula calculates gratuity: Gratuity = Last Drawn Salary × Number of Years of Service × 15 ÷ 26 The formula consists of several components which we will define. Last Drawn Salary The employee's total earnings include the basic salary and the dearness allowance (DA). The total salary calculation does not include bonuses or incentives. The employee's total employment duration with the employer defines this metric. The calculation starts after an employee completes six months of work because less than that period does not involve any actual work. The term '15' refers to the statutory factor that provides 15 days of wages for every year of service. 26 The number of working days in a month excluding Sundays and holidays equals this number. This number of active workdays determines how organisations calculate employees' daily wages.Example of Gratuity Calculation
Let’s say an employee has worked for 10 years in an organisation with a last drawn salary of ₹50,000 basic salary DA. The calculation for gratuity proceeds as follows: Gratuity = 50,000 × 10 × 15 ÷ 26 The total gratuity amount calculates to ₹288,461.53. The employee receives gratuity benefits worth ₹288,461.53. Factors Affecting Gratuity Calculation Multiple factors determine how the gratuity calculation process works, which leads to various outcomes. Salary Increases The last salary which an employee received determines the gratuity payments. Employees who receive a salary hike during their final working months will see an increase in their gratuity amount. Long periods of absence due to extended sick leave result in reduced total work time, which affects service tenure. The right to receive gratuity remains intact for employees who miss work because of a medical condition or injury. According to standard guidelines, part-time employees do not qualify for gratuity benefits except when their contracts specifically state otherwise.Taxation of Gratuity
The total gratuity amount which the employee receives becomes taxable until it reaches the predetermined limit. Employees who fall under the Payment of Gratuity Act will receive tax exemption for gratuity payments which reach up to ₹20 lakh according to The Income Tax Act Section 10(10). A gratuity payment becomes taxable after the total sum reaches ₹20 lakh. The employee's total income serves as the basis for calculating taxes on their gratuity payments.Gratuity Payment Process
The employer becomes responsible for gratuity payments after the employee has met all eligibility requirements. The employer must pay the amount within 30 days after the employee retires or terminates their employment. The employer becomes legally bound to pay interest on the outstanding gratuity amount when the payment delays exceed the designated payment period. The relevant authority or labour court will handle payment disputes because they have jurisdiction over such matters.Conclusion
Gratuity provides financial assistance to workers who have dedicated years of service before departing their jobs. The Payment of Gratuity Act 1972 ensures that employees receive a defined payment when they exit an organisation through resignation, retirement or termination. At Bajaj Broking, Seedhi Simple Investing is rooted in the belief that clarity builds confidence. In a market often crowded by jargon and noise, the philosophy promotes disciplined simplicity, structured understanding, and transparent communication. It empowers investors to move from impulse to informed participation, engaging markets with reason, perspective, and long-term intent. Note to readers: This article is part of HT's paid consumer connect initiative and is independently created by the brand. HT assumes no editorial responsibility for the content, including its accuracy, completeness, or any errors or omissions. Readers are advised to verify all information independently. Want to get your story featured as above? click here! News / Genesis / What Is Gratuity & How Is It Calculated Under Indian Law?Gratuity functions as a financial award which employers give to workers after they complete long periods of service. The organisation pays this amount when an employee departs, either through retirement or resignation or termination. The Payment of Gratuity Act 1972 establishes the legal framework for gratuity payments in India. The Act makes sure that employees receive this benefit if they worked with the employer for a certain period of time.
Gratuity works as a legal right which requires employers to make payments to staff members who fulfil the necessary conditions. The law applies to businesses that employ more than ten workers, thus creating a financial safety net for employees who choose to leave their jobs.
Service Period The employee must have completed at least five years of continuous service with the employer. Employees who leave before completing five years of service lose their right to gratuity payment unless their departure results from death or permanent disability.
Employees who exit through retirement or resignation or termination or business closure become eligible for gratuity payment.
Exclusion Employees who have worked for less than five years or who leave voluntarily before completing this period are generally not eligible for gratuity. Gratuity payments become available for employees who leave their job because of death or disability.
Gratuity = Last Drawn Salary × Number of Years of Service × 15 ÷ 26
The formula consists of several components which we will define.
Last Drawn Salary The employee's total earnings include the basic salary and the dearness allowance (DA). The total salary calculation does not include bonuses or incentives.
The employee's total employment duration with the employer defines this metric. The calculation starts after an employee completes six months of work because less than that period does not involve any actual work.
The term '15' refers to the statutory factor that provides 15 days of wages for every year of service.
26 The number of working days in a month excluding Sundays and holidays equals this number. This number of active workdays determines how organisations calculate employees' daily wages.
Gratuity = 50,000 × 10 × 15 ÷ 26
The total gratuity amount calculates to ₹288,461.53.
The employee receives gratuity benefits worth ₹288,461.53.
Factors Affecting Gratuity Calculation
Multiple factors determine how the gratuity calculation process works, which leads to various outcomes.
Salary Increases The last salary which an employee received determines the gratuity payments. Employees who receive a salary hike during their final working months will see an increase in their gratuity amount.
Long periods of absence due to extended sick leave result in reduced total work time, which affects service tenure. The right to receive gratuity remains intact for employees who miss work because of a medical condition or injury.
According to standard guidelines, part-time employees do not qualify for gratuity benefits except when their contracts specifically state otherwise.
A gratuity payment becomes taxable after the total sum reaches ₹20 lakh. The employee's total income serves as the basis for calculating taxes on their gratuity payments.
The employer becomes legally bound to pay interest on the outstanding gratuity amount when the payment delays exceed the designated payment period. The relevant authority or labour court will handle payment disputes because they have jurisdiction over such matters.
At Bajaj Broking, Seedhi Simple Investing is rooted in the belief that clarity builds confidence. In a market often crowded by jargon and noise, the philosophy promotes disciplined simplicity, structured understanding, and transparent communication. It empowers investors to move from impulse to informed participation, engaging markets with reason, perspective, and long-term intent.
Note to readers: This article is part of HT's paid consumer connect initiative and is independently created by the brand. HT assumes no editorial responsibility for the content, including its accuracy, completeness, or any errors or omissions. Readers are advised to verify all information independently.
Want to get your story featured as above? click here!
Source: HindustanTimes
Related Posts: Martina Navratilova Rips ‘Calculated’ Roof Closure Following Jannik Sinner Scare This zodiac sign needs to take calculated risks to move ahead Which Central Govt Employees Are Eligible For Increased Gratuity Of Rs 25L Gratuity calculation Centre Clears Confusion On Rs 25 Lakh Gratuity Cap Gratuity eligibility to minimum wages Is ‘fair use’ really fair to artists under Indian copyright law 5 Muslim girls booked under anti-conversion law for allegedly forcing Hindu friend to wear burqa 15 declared foreigners told to leave state under 1950 expulsion law New crackdown under anti-terrorism law
Former India captain Sunil Gavaskar has said Sunrisers Leeds' signing of Pakistan spinner Abrar Ahmed "indirectly contributes to the deaths of Indian soldiers and civilians". Gavaskar's comments are the most high-profile criticism of Sunrisers' deal for Abrar at last week's Hundred auction
5 hours ago
The US artificial intelligence (AI) firm Anthropic is looking to hire a chemical weapons and high-yield explosives expert to try to prevent "catastrophic misuse" of its software. In other words, it fears that its AI tools might tell someone how to make chemical or radioactive weapons
5 hours ago
If one wants to explore the many debates and controversies surrounding the Congress and its role in shaping India’s political trajectory, there may soon be a new address in the capital to turn to. At 3, Safdarjung Lane, the official residence of Nishikant Dubey — the Bharatiya Janata Party MP
5 hours ago
Chelsea have been handed a Premier League record fine of £10.75m and a suspended transfer ban. It was a result of the club making secret payments to unregistered agents and third-parties over transfers between 2011 and 2018. But it could have been a lot worse
5 hours ago
Kerala Congress (M), BDJS announce names of 12 candidates eachKerala Congress (M) and BDJS announced candidates for the upcoming assembly polls, including KC(M) chairman Jose K Mani from Pala and 12 others from BDJS. Published on: Mar 17, 2026 7:36 AM IST By Vishnu Varma
5 hours ago
Iran’s National Security Chief Ali Larijani on Monday penned a note to Muslim countries, questioning their lack of support for Tehran as the US-Israeli war is now entering its third week with no clear end in sight, disrupting global energy supplies and raising fears of a spike in global inflation
5 hours ago
Nagaon MP Pradyut Bordoloi expressed strong displeasure over Dr. Asif Nazar being considered for the Lahorighat Assembly ticket, citing Nazar's alleged association with an individual charged in an attack on Bordoloi. Bordoloi wrote to AICC General Secretary Jitendra Singh
5 hours ago
A sessions court in Gujarat’s Gir Somnath district on Monday convicted five persons and acquitted 35 others in connection with a 2016 case in which seven Dalits were assaulted in the town of Una, The Indian Express reported. Additional Sessions Judge Jignesh Pandya of the court in Veraval
5 hours ago
It's Hollywood's biggest night. The 98th Academy Awards featured emotional speeches, comical relief and a bevy of backstage fun. But it was perhaps a night to forget for Timothée Chalamet. As well as losing out to Michael B Jordan for best actor and One Battle After Another for best picture
5 hours ago
US President Donald Trump on Monday said more than 30 mine laying ships of Iran have been destroyed which has affected Tehran’s capacity to threaten commercial shipping in the Strait of Hormuz. “We are hammering their capacity to threaten commercial shipping in the Strait of Hormuz with more
5 hours ago
Love Horoscope Today for March 17, 2026: A spontaneous moment could lead to a meaningful connectionLove Horoscope Today, March 17, 2026: Find daily astrological predictions for all sun signs. Published on: Mar 17, 2026 7:28 AM IST By Neeraj Dhankher Share via Copy link Aries: Mars is pushing you to
5 hours ago
Dubai arrests Iranian drone strike survivors after they sent explosion photos to loved ones3 foreigner nationals who survived drone strike in Dubai have been arrested after sending photos of the explosions to family members. Updated on: Mar 16
5 hours ago
‘Firms need to move to adaptive, energy-efficient AI models’Sarah Hooker is convinced that the future lies in AI systems that use less computing power, cost less to run and can adapt to the needs of users. Published on: Mar 17, 2026 6:58 AM IST By Shweta Taneja Share via Copy link In the last
5 hours ago
Baghdad witnessed a significant drone and rocket attack on the U.S. embassy early Tuesday. This incident marks the most intense assault since the commencement of the U.S.-Israel war with Iran. Iraqi security forces have heightened their presence across the capital. The Green Zone
5 hours ago
Russell Wilson trade update: Chiefs hand a shock to Giants QB with Justin Fields move Published on: Mar 17, 2026 5:03 AM IST By Khushi Arora Share via Copy link New York Giants quarterback Russell Wilson (3) waves to fans after the game against the Dallas Cowboys (IMAGN IMAGES via Reuters Connect)
5 hours ago
![London [UK], March 17 (ANI): The Premier League has completed a disciplinary process with Chelsea FC in respect of historical breaches relating to Financial](http://newsorbit360.com/files/news/en/imgs/chelsea-fined-and-faces-supended-transfer-ban-by-premier-league.webp?height=520)
London [UK], March 17 (ANI): The Premier League has completed a disciplinary process with Chelsea FC in respect of historical breaches relating to Financial Reporting and Third Party Investment.In 2022, Chelsea FC’s current owners voluntarily reported to the League that they had evidence of
5 hours ago
A Bengaluru-based cafe has drawn attention on social media after adding a 5 per cent “Gas Crisis Charge" to a customer’s lemonade order, sparking debate on social media platform X. The unusual fee, applied on a bill for two mint lemonades, has left many users amused and some questioning its
5 hours ago
Editorial independence is core to our work. Some links may earn us a commission, without influencing our opinions.Still using an older laptop? These Intel 13th Gen laptops show what modern performance feels likeIntel 13th Gen laptops bring improved performance
5 hours ago
US President Donald Trump said on Monday that he is planning to delay a high stakes visit to China later in March by about a month because of the Iran war. "We've requested that we delay it a month or so," he told reporters at the White House
5 hours ago
LDF ally ISJD, UDF ally RSP name candidates for four seats eachThe ISJD and RSP announced their candidates for Kerala Assembly polls, with ISJD's K Krishnankutty retiring from politics and RSP seeking assembly representation. Published on: Mar 17, 2026 7:30 AM IST By Vishnu Varma
5 hours ago
Horoscope Today, March 17, 2026: Operational strategies at work need refinementHoroscope Today: Read the astrological predictions for each zodiac sign based on an expert's guidance on March 17, 2026. Published on: Mar 17, 2026 7:19 AM IST By Dr Prem Kumar Sharma
5 hours ago
The report from Elara Capital said retail gasoline and diesel prices “could be fully protected through excise cuts until roughly $110/bbl, beyond which price hikes on diesel and gasoline would become inevitable”. Also Read :Fino Payments Bank Shares Fall To 52-Week Low Amid Probe Reports;
5 hours ago
Punjab Assembly session: House passes motion against LoP Bajwa over ‘band player’ remarkThe Punjab assembly condemned opposition leader Partap Singh Bajwa for alleged derogatory remarks about a minister, leading to chaos and a walkout by Congress. Published on: Mar 17
5 hours ago
More than a thousand citizens in Ladakh's Leh and Kargil regions rallied on Monday, echoing calls for statehood and adherence to the Sixth Schedule. Leaders from the Apex Body Leh alongside the Kargil Democratic Alliance expressed their discontent regarding the central government's stance
5 hours ago
Menstrual pain is often dismissed as an inevitable part of being a woman. But when cramps become debilitating, interfere with daily life or are accompanied by chronic pelvic discomfort, they may signal something more serious. One such condition is endometriosis – a long-term disorder affecting
5 hours ago
Khushbu Sundar comes out in support of Trisha amid her viral pics with Vijay: ‘She is one of the most dignified women’Khushbu Sundar has addressed the online chatter surrounding the public appearance of Vijay and Trisha Krishnan, after the divorce petition filed by Sangeeta. Mar 17, 2026
5 hours ago
Rex Culpepper's fiancee pays sweet tribute after tragic bike accident death: ‘I don’t regret' Published on: Mar 17, 2026 4:55 AM IST By Yash Nitish Bajaj Share via Copy link Former Syracuse quarterback Rex Culpepper died after an accident on Saturday (Instagram/Rex Culpepper) Rex Culpepper
5 hours ago
