Hi Sachin,
The calculation of grauity as per formula is very simple=
= the Last salary drawn x 15/26 x no.of years of service (last year of service where it is more than 6 months then has to be rounded off to one year).
Payment of Gratuity Act, 1972
Section: 2 - Definitions.
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[8] [(r) "superannuation", in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service at the age on the attainment of which the employee shall vacate the employment;]
(s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which arc paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wage,s and any other allowance.
The 'Salary' for the purpose of gratuity calculation should include Basic Plus DA.
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Also read this link for income tax liability on gratuity amount and, other details-
https://www.citehr.com/610737-curren...lakh-20-a.html