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Calculator · Direct tax

Gratuity, leave encashment, VRS and pension exemption

This tool finds the exempt and taxable parts of gratuity, leave encashment, voluntary retirement compensation and commuted pension. It is used by retiring or separating employees and pensioners. You need to enter last drawn salary, years of service, leave balance and the amount received, and the result shows the exempt limit, the exempt amount and the taxable balance.

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How to use this calculator

  1. Enter last drawn salary, years of service, leave balance and the amount received.
  2. Choose the type of receipt and whether the employer is covered by the gratuity law to match your situation.
  3. Read the exempt limit, the exempt amount and the taxable balance in the result.

Exemption limits depend on the employer type and on earlier receipts; confirm these before treating an amount as exempt.

The result is an estimate for the figures you enter. It is not a filed return, a certificate or professional advice. Rates, thresholds and section numbers change with each Finance Act, and the Income-tax Act, 2025 applies from 1 April 2026 with new section and form numbers.

For the related work, see Income tax return (ITR) filing.

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Sources

Last reviewed: . General information only. Check the official source or speak to a Chartered Accountant before acting on a result.

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