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Aditya Birla Sun Life Insurance Company Limited
Aditya Birla Sun Life Insurance Company Limited
Gratuity Calculator
Salary should be in the range of 500 to 2 Cr
Years of service in range of 5 to 60 yrs
Total Gratuity Payable
0.0
Disclaimer : The above calculator is provided for illustrative and representational purposes only. The results generated should not be relied upon for making financial, legal, or any other decisions. Users are strongly advised to consult with qualified professionals before making any decisions based on the information provided.
Benefits of using a gratuity calculator
If you are planning on calculating your gratuity and planning your future expenses, it makes sense to do so by using a gratuity calculator. There are many different benefits of using a gratuity calculator.
Some of these are:
Accuracy
One of the primary advantages of using a Gratuity Calculator is the accuracy it provides in determining the gratuity amount. It eliminates the risk of manual calculation errors, ensuring that both employees and employers have a clear understanding of the gratuity payout.
Time Saving
Manual gratuity calculations can be time-consuming, especially for organisations with numerous employees. A Gratuity Calculator streamlines this process, providing results within seconds and saving valuable time.
Financial Planning
Knowing the gratuity amount in advance allows employees to plan their finances effectively, especially during significant life events like retirement. It helps in setting realistic financial goals and ensures a comfortable transition into the post-retirement phase.
Gratuity Calculation formula
The gratuity calculation formula depends on whether you are covered under the Payment of Gratuity Act, 1972, or not. For employees covered under the Act, the formula is as follows:
Gratuity = (Last Drawn Salary × 15/26 × Number of Years of Service)
This includes basic salary and dearness allowance, but does not include any other allowances.
The fraction represents 15 days out of a total of 26 working days in a month.
The total number of completed years of service, with any part of a year rounded up to the next higher year.
Eligibility for Gratuity
As is the case with most financial products, there are certain eligibility criteria that must be met. To be eligible for gratuity, an employee must meet the following criteria:
How to Use the ABSLI Gratuity Calculator?
Using the Aditya Birla Sun Life Insurance (ABSLI) Gratuity Calculator is a straightforward process. It’s an accurate gratuity calculator Indians can use to calculate the gratuity amount.
Here's a step-by-step guide:
Navigate to the ABSLI website, where you can find the Gratuity Calculator tool.
Enter the required information, including your last drawn salary and the number of years of service.
Click the "Calculate" button to obtain instant results, including the estimated gratuity amount.
Use the calculator's results to plan your finances effectively and make informed decisions regarding your gratuity funds.
Taxation Rules for Gratuity
Gratuity is subject to tax rules in India. As per current taxation rules, gratuity received by government employees is fully exempt from income tax.
However, for non-government employees:
Where Should You Invest Your Gratuity Funds?
Investing your gratuity funds wisely is crucial to secure your financial future. It can help you plan expenses, meet specific goals, and even plan for retirement.
Here are some investment options to consider:
Consider placing your gratuity amount in a fixed deposit account to earn a steady and secure income.
Invest in mutual funds to potentially generate higher returns over the long term. Choose funds based on your risk tolerance and financial goals.
PPF offers tax benefits* and a fixed interest rate, making it a popular choice for long-term savings.
NPS is an excellent option for retirement planning, providing tax benefits* and a diversified investment portfolio.
If you have a high-risk tolerance and are willing to invest time in research, consider investing in stocks for potentially higher returns.
Real estate can be a long-term investment option, providing rental income and potential capital appreciation.
Debt funds offer stable returns and are relatively less risky compared to equity investments.
Before making any investment decisions, consult with a financial advisor to create a personalised investment plan that aligns with your financial goals, risk tolerance, and investment horizon.
FAQs on Gratuity Calculator
The gratuity calculation formula for employees covered under the Payment of Gratuity Act, 1972, is as follows: Gratuity = (Last Drawn Salary × 15/26 × Number of Completed Years of Service)
For employees not covered under the Payment of Gratuity Act, the gratuity calculation formula is determined by the terms of their employment contract. It may be more favourable than the statutory formula, depending on the employer's policy.
As per the latest rules, the maximum gratuity amount that can be exempt from income tax is Rs. 20 lakhs. Any gratuity amount exceeding this limit is taxable as per the individual's income tax slab.
To be eligible for gratuity, an employee must complete a minimum of five years of continuous service with the same employer. If you resigned after working for 4.5 years, you would not be eligible for gratuity under the Payment of Gratuity Act. However, you should check your employment contract or company policy, as some employers may offer gratuity benefits even if the statutory requirement is not met.
Yes, there is an upper limit on the gratuity amount that is exempt from income tax. As mentioned earlier, the maximum gratuity amount that can be exempt is Rs. 20 lakhs. Any gratuity amount exceeding this limit is taxable.
* Tax benefits are subject to changes in tax laws. Kindly consult your financial advisor for more details
ABSLI Nishchit Aayush is a non-linked non-participating individual savings life insurance plan (UIN No 109N137V12)
^ - Provided 0 year deferment & Annually in Advance payout frequency is chosen at the time of inception of the policy. Annually in Advance payout frequency is only available in "Annual" premium payment mode.
~Male- 25 yrs invests in ABSLI Nishchit Aayush Plan with Level Income + Lumpsum Benefit. He chooses premium payment term 10 yrs , policy term 40 years, benefit option -Long Term Income, Sum Assured 7 times of Annualized Premium and Deferment Period 0 years. Annualized Premium is ₹1,20,000 (Exclusive of GST.). Annual Income of ₹ 42,360 (42,360*40= 16,94,400) + Maturity Benefit (₹16,80,000)= ₹ 33,74,400
#Provided all due premiums are paid
ADV/4/24-25/95
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