India's New Gratuity Rules: Eligibility Reduced from 5 Years to 1 Year Benefiting Millions of Workers

Nov 24, 2025 04:49 pm CST

India has reduced gratuity eligibility from 5 years to 1 year of service, significantly benefiting fixed-term employees. The reform includes an expanded definition of wages, higher calculation base, and mandatory payment within 30 days. This comprehensive guide explains who benefits, how gratuity is calculated, and the maximum tax-free limit of Rs 20 lakhs.