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Dear All,
Is it mandatory to get the gratuity valuation done. If yes can it be annually.
We get our gratuity valuation done from a certified Actuary. This person is charging a high fee. Can someone provide contact number of a certified Gratuity Actaurial.

Dear Smita. I do not think so. Regards, R.N.Khola Skylark Associates, Gurgaon(Haryana) (Labour Law & Legal Consultants) 09810405361
Dear Smita, You don’t need to value your gratuity for your auditors. Atleast the Act doesn’t say so. Regards
Hi Smeta,
There is no need to calculate gratuity valuation by any other people,your company person can do this by themselve.
Why your auditor is asking for higer price for this,you can negiotiate with other firm ?
And it is only applicaton if any employee is discharging form your company after its eligibility.
Have you added gratuity amount in the employee CTC?
Please let us know the complete answer from your side.
dont give heavy amount to any consultant for this,i can send you a formula bar precalculated excel sheet where you can calculate it easily.
Best Regards
Sajid Ansari-Delhi

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Dear All
Gratuity valuation is a mandatory requirement under AS15 accounting standards. Any auditor should be verifying the Gratuity valuation process/documents as per this - If I am right, the auditors are supposed to verify whether the Company has made yearly provisions for Gratuity payments which may arise in the future.

This comes under actuary valuation and is required under AS-15 accounting standard. After discloure of fraud in Satyam computer, it has become mandatory and all statutory auditors are asking for it. It is not new but in past it had not gained so much importance.

Dear Smita,
Acturial valuation of Gratuity liability is mandatory under Income Tax Act. It should be annually. The acturial valuation of Leave Encashment Liability is also mandatory.
This practice is started from F.Y. 2007-08, so wait, more certified Actuary will be available this year.
Mohd. Arif Khan

TRY it out yourself and if require ask your auditor to check it. Below menitoned is formula’s to calculate Gratuity: A-Basic+DA * 15 / 26 * No. of Year B-Basic+DA/26*15*No.of Services
Gratuity valuation by a certified Actuary is essentially required to ensure that the organisation has made neccessary provisions for payment of gratuity to its employees upon resignation or winding up.
Internal/External auditors use the Actuaries reports to check whether the provisions are made accordingly. This also forms as a check point to ensure that the organisation is not under-funding the gratuity account.
Attached are the details of one such actuary based out of Mumbai.
K A Pandit - 022 22042231
Hope this helps


If the gratuity fund is maintained by a trust in the organisation you may have to get it certified by an Actuary. Even if we have done the calculations which is 100% right, it has to be certified by the actuary. We may have to provide our assumptions on annual attrition rate, % increase in salary etc..

If the fund is maintained by the insurance company we may demand the report form them. The insurance companies will have acturies appointed in their organisation and there is no additional cost attached to it.

It is rightly said that, if there are any leave encashment policy, the acturial valuation has to be done for the leave as well and the certificate has to be obtained in the AS 15 prescribed format.

Both this activities has to be done annually and preferrably at the end of the financial year.

Please let me know your mail ID i shall refer an actuary.


Deepa Sudhakar

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