JAgdis L Trivedi
Senior General Manager H R Unison Pharmaceuticals
Gratuity & Leave Encashment Trust Fund
Senior Hr Advisor And Blogger
Manager-hr & Admn.
+1 Other

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Dear Members,
Please suggest, whether Employee Group Gratuity Trust is required to register under Relevant State Trust Act with Deputy Registrar/Charity Commissioner or not? The Co. is a Public Limited Company & planning to undergo Group Gratuity Scheme with LIC of INDIA.
Manu Saxena

The State Public Trust Act (example Bombay Public Trust Act) and Registration of Societies Act is meant only for charitable, religious and educational purpose. Gratuity is trust is different from this.
Yes, it is mandatory to create a gratuity trust. For this, you have to make a trust deed, a board resolution from top management, appointment of trustee and then you have to approach income tax commissioner of your concerned area and you need to submit the trust deed.
Income Tax commissioner after due scrutiny will issue a gratuity trust formation certificate. On the basis of this, you have to open a bank account on Gratuity Trust name and you can approach LIC, Kotak Mahindra or ICICI or any such other institute to manage your fund after calculating liability on the basis of acturial valuation.

You do not require to do this as each enactment is different from other and with specific objective. Here you only need to provide Form-A ( Notice of Opening) to the respective Controlling Authority ( for Gratuity Act & Rule) of your state/ location.

Dear Hpegovind, Have you any idea about private Insurance company performance for group gratuioty scheme. Please share J L Trivedi
State bank have registration of Employee Group Gratuity Trust is required to register under Relevant State Trust Act. So we need any respective authority letter to it is not require registration of group gratuity.
I am residence in Maharashtra my firm M/s Vaidehi Engineering Works we are working in Maharashtra, so we need help to open the account in SBI or any government bank & which document require for opening the current account.

Group Gratuity Benefits Consultants
We have almost 10 years of experience in providing the following Services:-
1. Group Gratuity Insurance Schemes Advisory.
2. Gratuity Payment Computation Consultation
3. Gratuity Payment related Litigations Consultation
4. Accounting/Taxation related Consultation
5. All Type of Insurance Consultancy for Corporate In case of an immediate consultation
Our services are mostly availed by the following:-
Private Sector Employers,
Employees working in the Private Sector,
Private Schools Employers and Private Sector Teachers.
Our Advisory Services covers all aspects (i.e.Legal, Income Tax & Accounting related) for the creation of the Group Gratuity Trust Fund. We have a team of experts having Decades of experience in handling the Legal, Accounting and Income Tax related issues of the Gratuity Benefits and Group Gratuity Trust Fund.
In case of an immediate consultation, you may contact me
Payment of Gratuity Act 2018 Amended, Gratuity Payment Computation, Gratuity Trust Fund Consultation, Key Men Retention Scheme Consultation, Litigation of Gratuity Payments, Gratuity Liability Consultation for Transfer Employees, and Consultation of Gratuity Act Rules and Regulations as Gratuity Act 2018 Amended

This post is an attempt to give a brief about Impact of increase in Salary and Past Service on Gratuity Payments and requirement of Gratuity Trust Fund to meet .
Gratuity benefits are governed by  "The Payment of Gratuity Act 1972" and paid by the employer to an employee on exit from service after he has rendered continuous service for not less than five years:
 (a) On his superannuation (b) On his resignation (c) On his death or disablement due to injury or disease.
In case of (c) vesting condition of 5 years does not apply.
Liability on account of gratuity experiences sharp increase every year due to the nature of its computation. Apart from an increase in service, an increase in salary also contributes to increase in liability substantially as the benefits are payable on the last drawn salary.
For Example,
Gratuity Liability of an employee of 35 yrs. with basic salary as Rs, 26,000/- and have completed 5 years of Past service as on 31.03.2018 will be :-
= 75,000/-
Case 1
Gratuity liability with Increase of 1 year past service and without any increment in Basic Salary.
Gratuity Liability of an employee of 36 yrs. with basic salary as Rs. 26,000/- and have completed 6 years of Past service as on 31.03.2019 will be :-
= 90,000/-
Case 2
Gratuity liability with Increase of 1 year past service & 5% increment in Basic Salary (i.e. 26000*1.05 = 27300/-)
Gratuity Liability of an employee of 36 yrs with basic salary as Rs. 27,300/- and have completed 6 years of Past service as on 31.03.2019 will be :-
 (15/26)*27300*6 = 94,500/-
Gratuity Liability on retirement in 31.03.2043 with 5% increment in Basic Salary {i.e. 26000*(1.05^25) = 88045/-}
Gratuity Liability of this employee on retirement at age 60 yrs with basic salary as Rs. 88,045/- with 30 years as on 31.03.2043 will be :-
 (15/26)*88045*30 = 15,23,860/-
From above example, it is clear that with a small change of 5.00% in basic salary, increases the gratuity liability by 1.26times in 1 year. Similarly 5% increase over next 25 yrs in Basic Salary will increase the gratuity liability 20.32 times which is payable on 31.03.2018 . Hence it becomes mandatory for employer to start investing in Gratuity Fund with consistent growth and insulated from market risks.
To know more about : -
1. Steps Involved in creating a Gratuity Fund,
2. How to use Gratuity Fund as Retention Tool for curbing the attrition rate,
3. Quantum of Income Tax Benefits of creating Gratuity Fund,
4. Steps Involved  Approval of Gratuity Trust Fund from competent Authority,
5. Critical issues & Features of Group Gratuity Schemes of Insurers

Tika Ram Chaudhary - Gratuity Trust Fund Consultant in Delhi NCR Region
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 employees increase. Organizations with sizeable 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 taxation planning and investment management, it is advisable for organizations to Form an Approved Gratuity Fund. The contribution made by the companies into an approved Gratuity Fund is allowed as deductible expense under section 36 (1) (v) of the income tax act, 1961. Similarly Interest earned by the Approved Gratuity Fund is also Tax free. Contribution received from the employer into an approved Gratuity Fund and Tax Free Interest earned from the Investment together is used by the Trust to dispose of the Gratuity Liability of the company in future.
We offer our Consulting Services for Establishment of an Approved Gratuity Fund and Advisory Services for Investment of Gratuity Fund either into Group Gratuity Schemes of Insurer or into Self- Managed Investment as per the guidelines of the Regulator. We have given our consultation to CFOs, Directors, Heads of HR, Finance and Tax Planning department of the Companies for Formation of an approved Gratuity Trust and its Investment. Our clientele is spread in all sectors of the Indian Economy, in the Public & Private Sectors which covers areas of Manufacturing, Software, Technology, Electricity, Electronics, Call Centers, Banks,
In case you need our consultancy services, then you may contact us at the following:-
Tikaram Chaudhary
Gratuity Trust Fund Consultant
(10 Years of Experience in Gratuity and Leave Encashment Valuations and Formation of Trust fund)
Office Address : R 11, F/F, R Block, Vikas Nagar, New Delhi -110059
Mobile Number : 9211637063
Email Id : ,
Blog: http://gratuitytrustfundconsultant.blogspot.com
Website: https://gratuity-trust-fund-consulta...business.site/
LinkedIn Profile : https://www.linkedin.com/in/tikaram-chaudhary-a5727848/
(All Consultancy Services provided by us are subject to terms & conditions will be stated when a consultation job is accepted.)

Retention Incentive to Employees - A win win situation for Employers and Employees
Incentive to Employees in the form of deferred compensation, when in a policy framed judiciously brings in a number of advantages, both for Employers and Employees. Examples are:-
1. Motivation to Employees providing encouragement and simulation to improve productivity.
2. Creation of a spirit amongst Employees to enhance the image of the Employers in general public.
3. Recognition for high achievers and Key Personnel.
4. Appreciation for good work.
5. A tool for retention of Key Employees in employment for a longer duration.
6. Reduction in Attrition Rate of Employees.
7. An opportunity for High Income Earning Employees to defer their Tax Liability to a future period.
Organization can offer other forms of deferred Incentives. Few are listed below:-
A. Incentive in Form of Property (i.e. Villas, Flats, Plots etc.)
B. Incentive in Form of Gold.
C. Incentive in Form of Deferred Annuities Plans.
D. Incentive in Form of Insurance Plans.
For more details in the matter, you may contact us at or call us at 9211637063
Tikaram Chaudhary
Gratuity and Leave Encashment Trust Fund & AS 15 (R)/ IndAS 19/IAS 19 Consultant
Office Address : R 11, F/F, Vikas Nagar, Uttam Nagar, New Delhi - 110059
Mobile Number: 9211637063
Email ID - ,
Linkedin Profile : https://www.linkedin.com/in/tikaram-chaudhary-a5727848
Caclubindia Profile : https://www.caclubindia.com/profile....ber_id=1446582
Blog : http://gratuitytrustfundconsultant.blogspot.com
Google Business Website : https://gratuity-trust-fund-consulta...s.site/?m=true
(All Consultancy Services provided by us are subject to terms & conditions will be stated when a consultation job is accepted.)

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