Gratuity Rules in India are very clear. It states that every employee is eligible to get a gratuity (lump sum amount) at the time of leaving the job. This Amount is given on the basis of a formula. According to the gratuity act, every employer, who has 10 or more employees, has to follow the gratuity law. This law is applicable to government and private sector both. The government also give tax exemption on the gratuity payment.
Every employer is bound to give a gratuity amount to its employees if it employs more than 10 people. But you would get the gratuity only after completing at least 5 years in the service.
Gratuity Calculation Formula
Gratuity in India is calculated using the formula:
Gratuity = Last Drawn Salary × 15/26 × No. of Years of Service