Question
Is gratuity above ₹20 lakh taxable, and does the limit apply across employers?
Answer
Bottom line: Gratuity is exempt up to ₹20,00,000, and that limit is a lifetime total across all employers.
1. The exemption
Least of the actual gratuity, ₹20 lakh, or 15 days' salary for each completed year (using the 15/26 formula).
2. Lifetime cap
Exemption claimed with an earlier employer reduces what remains — the ₹20 lakh is aggregate.
3. Government employees
Their gratuity is fully exempt.
Compute yours with our Gratuity Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.