How it works
Fifteen days of your last drawn basic plus dearness allowance is computed for each counted year of service. Where the employer is covered by the Act, a month is treated as twenty-six working days rather than thirty, on the reasoning that Sundays are not worked — which makes each year worth about 15% more than a straightforward monthly split would suggest.
Service is then rounded. Six months or more beyond a completed year counts as a whole further year, so ten years and seven months is paid as eleven. Five months is paid as ten. That is a cliff worth knowing about before handing in a resignation.
More detail
The exemption is capped at ₹20,00,000 across your working life. Anything above it is added to your income and taxed at your slab rate, which for a long career at a high salary is the binding constraint rather than the formula.
The calculator does not enforce the five-year minimum service condition — it reports what the formula gives for the service you enter, and the condition is noted in the exclusions.
To see what any taxable portion costs, use the income tax calculator.
For the other lump sum arriving at the same time, see the EPF calculator.
To project what investing it would produce, try the lumpsum calculator.