Taxable Gratuity Calculator Excel Template is a simple and ready-to-use excel template to the amount of gratuity that is taxable under the Indian Income Tax Act.
Income tax applicability differs from according to the companies falling/not falling under the Gratuity Act 1972 and also the type of company (Government or non-government).
An employee is entitled to get gratuity when he/she:
- Laid off
- Death or Disablement
An employee is entitled to gratuity if he/she completes a minimum service of 5 years with that particular employer. There is no minimum eligibility period in the case of death or disablement.
Taxable Gratuity Calculator Excel Template
We have created the Taxable Gratuity Calculator excel template with predefined formulas to easily calculate your taxable gratuity.
Let us discuss how to use this calculator to calculate gratuity.
How To Use Taxable Gratuity Calculator?
There are 3 different criteria to calculate taxable gratuity for any employee depending on his company and Gratuity Act applicability:
- Employees Falling under the Gratuity Act 1972
- Employees not falling under the Gratuity Act 1972
- State/Central Government Employees
Every employee is entitled to gratuity who is working in any company which has 10 or more employees on any day in the preceding 12 months.
Once the Gratuity Act is applicable to the company, even if the number of decreases below 10, the company falls under the Gratuity Act.
1. Employees Falling Under The Gratuity Act 1972
For employees falling under this category, least of the following is exempt from the income tax [Gratuity Act 1972, Section 10(10)(ii)]:
- Last drawn salary (basic + DA) X Years of Service X 15/26
- Rs. 20 lakhs (Earlier it was Rs. 10 Lakh)
- Gratuity Actually received.
In this section, you need to enter your name, years of service and last drawn salary (that is Basic + DA). The template will automatically calculate the taxable gratuity for you.
2. Employees Not Falling Under The Gratuity Act 1972
Employees falling under this category, least of the following is exempt from the income tax [Gratuity Act 1972, Section 10(10)(ii)]:
- Last 10 month’s average salary (basic + DA)* number of years of employment* 1/2.
- Rs. 10 lakhs (the hike of Rs 20 lakhs is not applicable for these employees).
- Gratuity actually received.
Similar to the above section, enter the name, sum of 10 months salary (that is Basic + DA) and. It will automatically calculate the taxable gratuity for you.
3. State/Central Government Employees
Gratuity paid by the government to government employees is fully exempt from tax. Gratuity received by state or central government employees [under Section 10(10)(i) of Gratuity Act 1972] on death-cum-retirement is completely exempt. Employees of the statutory corporation will not fall under this category.
Last drawn salary will not be total take home salary. It is only the basic salary in addition to the dearness allowance.
If your years of service are less than 5 years the gratuity calculator will display NIL.
Disclaimer: This template has been created for educational purpose. Kindly consult any tax consultant before finalizing the gratuity amount.
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