What is the formula for the calculation of Gratuity?

Salary Xnos. of years of service completedX15deviced by 26

Fifteen days wages for every completed year of service have to be calculated on the basis of wages paid to an employee for hte month divided by 26 days and the quotient multiplied by fifeen days.

i.e. Basic Pay + D.A. /26 X completed year of service X 15

If an employee works for 26 years, he will get "GRATUITY" for 15 months and accordingly in the same proportionately for further period of service without any limitation to service period.

what is the basis of this logic? Kidly Explain

Dear all,

Whatever I have said, that is explained under the SAection 4 of the Payment of Gratuity Act, 1972. Moreover, whatever, I have said, i.e. already explained above by ShriBirendra Prasad Singh i.e. Basic Pay + D.A. /26 X completed year of service X 15e. Basic Pay + D.A. /26 X completed year of service X 15

I have also mention this formula .e Salary Xnos. of years of service completedX15devided by 26

Salary mean Basic pay plus D.A. plus V.D.A(If applicable)

Thanks to all my learned friends for your valuable opinion.......

Whatever is stated by Adv. Birendra Prasad Singh is correct.It may be added that qualifying period for eligibility is minimum 5 years of contineous service. After qualifying period service rendered for more than six months in any year is to be taken as one year and service less than six months in that year is to be ignored.It should be noted that definition of wages under Gratuity Act is different than I.D.Act and only basic and D.D. is to be taker in consideration.

I have following component in my salar Basic, HRA, Spl Allowance & Conveyance. My question is should Spl Allowance be added to Basic to calculate gratuity amount.

Section 2 (s) of the Payment of Gratuity Act, 1972  specifically provides that wages means all remuneration which are earned by an employee while on duty or on leave in accordance witht the terms and condition of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commision, house rent allowance, overtime wages and any other allowance. 

It is therefore in my opinion only Basic pay and Dearness allowance would be added for the purposes of gratuity and all other allowances as mentioned would not be added for the purposes of gratuity.