salary

In case of Gratuity received by a Government Employee it is fully exempt from tax.
In case of Gratuity received by a non Government Employee than there arise 2 cases.
1. The employer is covered by payment of gratuity act, than least of the following is exempt from Tax:
*.15 days salary based on the salary last month drawn for every completed year of service or part thereof in excess of 6 months. Therefore the amount that shall be exempt from total Gratuity paid is calculated as:
last drawn salary x number of years in employment x 15/26.
Last drawn salary is Basic salary and DA. Number of years in service is rounded off to the nearest full year.
*.Rs 10,00,000
*.Gratuity actually received
2. The employer is not covered by the payment of gratuity act:
*.Half month’s salary for each completed year of service. While calculating completed years, any fraction of a year shall be ignored. Here salary is taken as the average salary of the10 months immediately before the month in which the person retires.
1/2 x avg salary for last 10 months x no of years in service.
*.Rs 10,00,000
*.Gratuity actually received

u can claim Rs 1000000/- as exemption  in life time 

remember in life time amout shount not more than 1000000/-