Salary essentials · 2 min read
Gratuity: understand the payment and its tax treatment.
Keep your employer’s working and the relevant exemption details together.
Educational guide · Updated 19 September 2026 · FY 2025–26 / AY 2026–27
The quick answer
Gratuity tax treatment depends on the employee category, applicable law, amount received and exemption conditions. Do not assume the entire payment is either taxable or exempt.
What to have ready
- The employer’s gratuity calculation and settlement statement.
- Your service period, salary details and employment category.
- Details of earlier gratuity exemptions, where relevant.
- The exempt and taxable amounts shown in your salary records.
Get a case-specific computation
Payment entitlement and income-tax exemption are separate questions. Ask for both calculations to be explained before including a gratuity amount in your return.
Sources & further reading
General educational information, not an individual tax opinion. Facts and filing-year rules determine your treatment; confirm current requirements before acting.
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