💰 Tax Savings · Tax-free income (Section 10)
Gratuity — up to ₹20 lakh tax-free (Section 10(10))
✍️ EaseValue Advisors · Updated 17 Jul 2026 · FY 2025-26
In short
Gratuity received on retirement, resignation or death is exempt up to ₹20 lakh under Section 10(10) — the exact limit depends on whether you're covered by the Payment of Gratuity Act.
How much is exempt
- Government employees: fully exempt.
- Covered by the Gratuity Act: least of — actual gratuity · ₹20,00,000 · 15 days' salary × years of service.
- Not covered: least of — actual · ₹20,00,000 · half-month's average salary × completed years.
The ₹20 lakh is a lifetime ceiling across employers. Gratuity while still in service is taxable.
The law behind it
Section 10(10)
General information for FY 2025-26 (AY 2026-27), not advice on your specific case. Limits, rates and conditions
change with each Finance Act and depend on your facts — confirm before acting. © EaseValue Advisors LLP.
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