Gratuity rewards long service: last-drawn basic plus DA, multiplied by 15/26 for every completed year. Pick your length of service to see the amount worked out across a range of salaries.
Under the Payment of Gratuity Act, an employee becomes eligible after five continuous years with an establishment of 10 or more people. The amount is (last basic + DA) × 15/26 for each completed year, paid as a lump sum on exit and tax-free up to ₹20,00,000. Longer service raises the multiplier in a straight line, so ten years pays twice what five years pays on the same salary.
These pages give the figure for each tenure so you do not have to run the formula by hand. For an exact number on your own basic and DA, open the gratuity calculator.
A few points that catch people out. Gratuity is paid on the last-drawn basic plus DA, not on gross salary or CTC, so a large allowance component does not raise it. Service of more than six months in the final year rounds up to a full year, while less than six months is ignored. The five-year eligibility is waived if service ends due to death or disablement, in which case the nominee is paid for the actual years worked. And the tax-free ceiling of twenty lakh rupees is a lifetime limit across employers, not a per-job figure, so gratuity received from an earlier employer counts toward it.