Seeking Guidance on Drafting an In-house Gratuity Policy for Our Tamil Nadu Manufacturing Company

Dear Seniors, kindly guide with the Gratuity In-house policy draft for implementation. We are a manufacturing company located in Tamil Nadu, and we are planning to maintain an in-house account for Gratuity. We are ready to pay employees the gratuity amount as per the legal terms.

We need a draft policy and procedure for Gratuity.

Gratuity Trust Setup

A gratuity trust may be set up to provide gratuity benefits to employees, acting as a separate legal entity. The trust must obtain approval under the Income Tax Act, 1961, to be recognized as an approved gratuity trust. Trustees can choose to manage the fund according to the bylaws of the trust.

Process of Formation

The process of forming an approved registered gratuity trust begins with obtaining an Actuarial Valuation Certification/Report from an actuary, which determines the initial contribution to be made by the company into the Gratuity Trust.