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Solution Gratuity is a voluntary payment made by an employer in appreciation of services rendered by the employee. In case of gratuity being received at time of retirement or death, the gratuity amount exempt is the least of the following: · Rs.20 lakh · Actual gratuity received · 15 days salary (last drawn) for every completed year of service or part in excess of 6 months (no. of days in a month taken as 26) As such, the maximum gratuity that will be exempt is Rs.20 lakh.
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