Two months of notice can be worth a full year of gratuity

Yes, a part-year counts — but only if it's more than six months. Under the Payment of Gratuity Act, a part-year in excess of six months is counted as a full year, while exactly six months or less is dropped. So 6 years 7 months is paid as 7 years, and 6 years 5 months is paid as 6. On a last-drawn basic + DA of ₹50,000 a month, those two months are worth ₹28,846 — and the date on your relieving letter decides which side of the line you land on.

Where the rule comes from

Section 4(2) of the Payment of Gratuity Act, 1972 pays fifteen days' wages for every completed year of service "or part thereof in excess of six months". The same section says that for a monthly-rated employee, fifteen days' wages means your last drawn monthly wages divided by 26 and multiplied by 15 — the familiar 15/26. Two things follow. Your gratuity accrues as a flat amount per completed year, and part-years are all-or-nothing: five months past a completed year adds nothing, seven months adds a whole year, and there is no pro-rata credit in between.

What the boundary is actually worth

At ₹50,000 of basic + DA, one completed year accrues 15/26 × ₹50,000 = ₹28,846. Leaving at 6 years 5 months pays ₹1,73,077. Leaving at 6 years 7 months pays ₹2,01,923. The work done in those two extra months is no different from any other two months — the entire ₹28,846 gap is the rounding rule.

• Basic + DA ₹30,000: ₹1,03,846 at 6y5m vs ₹1,21,154 at 6y7m — a ₹17,308 swing
• ₹50,000: ₹1,73,077 vs ₹2,01,923 — ₹28,846
• ₹75,000: ₹2,59,615 vs ₹3,02,885 — ₹43,269
• ₹1,00,000: ₹3,46,154 vs ₹4,03,846 — ₹57,692
• ₹1,50,000: ₹5,19,231 vs ₹6,05,769 — ₹86,538

The boundary repeats at every year of service, not just the seventh: at the same ₹50,000 basic + DA, 9 years 6 months pays ₹2,59,615 and 9 years 7 months pays ₹2,88,462. For most people the extra year is also entirely tax-free — gratuity for non-government employees is exempt up to ₹20 lakh across your career under Section 10(10), and at ₹50,000 basic + DA the formula only reaches that ceiling after roughly 69 years of service.

Why your notice period is the lever

Serving your notice period keeps your service continuous up to your last working day, and that date is what payroll counts. If you're at 6 years 5 months when you accept an offer, a two-month notice takes you to 6 years 7 months and rounds you up. Buy the notice out to join sooner and you may be relieved on the earlier date instead, dropping you back under the line. Before you agree to a buyout, confirm which date your relieving letter will carry.

Two honest limits. Gratuity is calculated on last-drawn basic + DA, not on CTC, so how much this is worth to you depends on how your salary is structured — check your payslip, not your offer letter. And none of it applies until you qualify at all: five years of continuous service, waived only on death or disability. Whether the six-month rounding also carries you across that five-year threshold is the one question this post won't answer for you — if you're within a few months of five years, get your employer's position in writing before you resign. Run your own basic + DA, years and months through the gratuity calculator to see your number.