Gratuity, as is well known, is a statutory liability of the employer. Also, since Gratuity is calculated on the basis of the last salary drawn, the liability of an employer increases rapidly as years pass on or as the salary of the employee's increase. Organizations with sizable Gratuity liability must have the Gratuity liability valued and funded separately. Dedicated Gratuity funding is one of the fundamental principles of sound corporate governance.
As a prudent financial practice, as well as for appropriate tax planning and investment management, it is advisable for organizations to Form an Approved Gratuity Fund. Few Benefits for the formation of Gratuity Trust are under:-
1. The Initial contributions & Annual Contributions into the Gratuity Trust by the company is allowed as a deduction under Section 36 (V) of the Income Tax Act 1961, whereas provision made against gratuity in the balance sheet on annual basis is disallowed.
2. Interest Income of the Gratuity Fund is not liable to Income Tax in Terms of Section 10 (25) (iv).
3. Separate funding of the Gratuity liability ensures that the pay-out as regards Gratuity does not create any problem in the financial management of the company and does not affect the organization’s liquidity position in the future years.
We offer following Services :-
Consultancy Services for Formation of Gratuity Trust for Gratuity Benefits
1. Formation of a New Approved Irrevocable Gratuity Trust.
2. Investment of Trust Money as per Income Tax Rules 1962.
3. Gratuity Trust Deed, Trust Rules, Applications.
4. Approvals of Trust in terms of Part C of Schedule IV from Income Tax Department in following cases :-
o Approvals for New Gratuity Trust or Group Gratuity Scheme
o Approvals for Change in Trust Deed
o Approvals for Change in Trust Rules
o Approvals for Change in Object of Trust
o Approvals for Change in Trustees
o Approvals for winding up of Trust due to winding up of the Company
o Approvals for amalgamation with another fund due to merger/acquisition of the Companies
5. Investment of Trust Money in Group Gratuity Schemes of Insurers.
o Traditional Group Gratuity Schemes of LIC
o Unit Linked Gratuity Schemes of Insurance Companies
Support Services Offered by us from our Professional Associates for Annual Accounting of Gratuity Benefits (i.e. Employee Benefits)
6. Actuarial Valuations in compliance of following Accounting Standards:-
o AS 15 (Revised 2005)
o IAS 19 (Revised 2011)
The services offered by us may be needed by you or by your clients:-
I. For compliance of Accounting Standards whilst preparing the Balance Sheet and Profit/Loss Statement as stipulated in Section 133 of the Companies Act 2013, so that they can give a true and fair view of state of affairs of the Company.
II. For getting the Tax Benefits under Section 36 (1) (v) & Section 10 (25) (iv) of the Income Tax Act, 1961 by creating an Approved Gratuity Trust or by starting an Group Gratuity Scheme of Insurer before closure of Financial Year ending 31.03.2020.
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2020, the services we deal in will be needed by many of your clients and we will be happy to provide our services if needed. In case of any clarification, you may contact me at 9211637063 or email me your queries at .
From India, Delhi