Should I Move My Gratuity Funds from LIC to a Private Company Like Allianz Bajaj?

Hi Guys,

I would like to know if it is a better option to transfer my present gratuity funds from LIC to a private company like Allianz Bajaj. Is it better, or should I continue with a government body? Please let me know your views on this. A private company provides better service, rate of return, etc.

Thank you,
Jingles

Hi,

Please first check with the private insurance company whether they are recognized by the Tax authorities to operate such funds.

Under the Payment of Gratuity Act, as per section 4A of the act, the funds are required to be invested with the Life Insurance Corporation of India, established under the Life Insurance Corporation of India Act, 1956.

The benefit of Income Tax will only be available to an employer if the gratuity fund is invested with LIC.

Superannuation, being a non-statutory fund in nature, is still regulated to allow expenditure made by an employer during the accounting year by the Tax authorities.

So, if the private company is authorized under the act, only then it is advisable; otherwise, the employer will not get the benefits of the investment made towards the funds during the accounting year.

LIC services have improved a lot, and they are more cooperative and open now. We need to generate awareness. Return on investment is also a regulated affair nowadays. So please check the above before proceeding.

Anil Anand

Dear Sir,

I have applied for full and final settlement of my Superannuation fund on 30.06.10 with Century Cement. However, to my utter surprise, my claim was rejected by the company on 29.7.10, stating that according to the rules of the superannuation fund, a member must have completed a minimum of 5 years of service with the organization. I was covered under the superannuation scheme from 1.12.2006 to 28.8.2008 at the age of 54 years and resigned due to illness on 28.8.2008 after reaching the age of 56. During this period, I also received yearly statements of contributions.

I am currently not employed with any organization. The company is now informing me that I am not eligible for the settlement. It seems the company may have taken advantage of this situation and claimed an Income Tax rebate from the IT department on the contributions made towards the Superannuation fund deposited in my name.

If the company is unable to pay me this amount, how can they benefit from the tax rebate on the funds deposited?

I would appreciate your prompt advice.

It would be great to receive replies also on my email – jha.kailashnath@gmail.com

Regards,
Kailash Jha

I am seeking clarification. If an employee is transferred from one old entity to another newly created entity within the same group, is it possible to transfer their gratuity and superannuation? If yes, could someone please provide information on the procedure? This matter is urgent.

Regards,
Rekha S