Understanding Gratuity Payment Compliance in Private Companies: What Are Your Options?

Gratuity Payment Compliance in Private Limited Companies

Q1. I would like to know if gratuity payment in a Private Limited company is a compliance requirement that is mandatory, just like EPF regulations.

Q2. If yes, is payment of gratuity through LIC premium a good option? I was informed by LIC personnel that the amount of premium will be decided after submitting the number of employees, their dates of birth, date of joining, etc.

Q3. Another question is, is the premium amount to be wholly borne by the company, or will the payment norms be similar to EPF, where a part is paid by contributions from both the employee's share and the employer's share in respect to Basic+DA salary?

I would be very obliged if our dear seniors could elaborate and simplify the answers.

Thanking you.

Regards,
Sangita

Gratuity Payment Compliance in Private Limited Companies

Q1. I would like to know if gratuity payment in a private limited company is a compliance requirement that is mandatory, just like EPF regulations? - Yes

Q2. If yes, is payment of gratuity through LIC premium a good option? I was told by LIC personnel that the amount of premium will be decided after submitting the number of employees, DOB, date of joining, etc. - LIC is a government organization, so the money will be in safer hands.

Q3. Another question is, is the premium amount to be wholly borne by the company, or will the payment norms be similar to EPF, where a part is paid by contributions of the employee share and employer share in respect to Basic+DA salary? - The whole premium will be borne by the company only.

I will be very obliged if our dear seniors can elaborate and simplify the answers. Thanking you.

Regards,
Sangita

As far as my knowledge goes, new registration in Gratuity Membership stopped from 1st July 2013 as per the new IRDA Guidelines. Please confirm if I may be wrong.

Thank you,

Regards,
Ashish