Navigating Karnataka's 2024 Gratuity Insurance Rules: How Can GTFC Help Your Business?

GTFC is India's leading corporate consulting service provider to more than 1,000 Indian and multinational companies across all sectors (e.g., startups, IT, FMCG, education, government companies, government autonomous bodies, private colleges, private schools, private hospitals, NGOs, hotels, hospitality organizations, pharmaceutical organizations, footwear companies, housing and infratech companies, housing finance organizations, insurance solutions providers, ministries, and many more) of the Indian economy for matters related to the following:

1. End-to-end consultancy services for Karnataka Compulsory Gratuity Insurance Rules, 2024.

2. Consulting services for the preparation of inputs for the Actuarial Valuation Report under AS 15 (Revised 2005) as per the provisions of Karnataka Compulsory Gratuity Insurance Rules, 2024.

3. Consulting services for obtaining valid insurance under Karnataka Compulsory Gratuity Insurance Rules, 2024.

4. Consultancy services for obtaining Gratuity Registration in Form - I with the Deputy Labor Commissioner's Office in compliance with Karnataka Compulsory Gratuity Insurance Rules, 2024.

5. Consulting services for the maintenance of Form - III (Nomination Forms) in compliance with Karnataka Compulsory Gratuity Insurance Rules, 2024.

6. Consulting services for the preparation of inputs for the Actuarial Valuation Report under AS 15 (Revised 2005) in compliance with Karnataka Compulsory Gratuity Insurance Rules, 2024.

7. Consulting services for setting up a new approved Gratuity Fund under Irrevocable Trust in compliance with Karnataka Compulsory Gratuity Insurance Rules, 2024.

8. Consulting services for vetting of Trust Deed, Trust Rules, Applications, Forms used for setting up a new approved Gratuity Fund under Irrevocable Trust.

9. Consulting services for old Gratuity Trusts CIT approval matters:

a. Company Name & Address Change.

b. Trust, Trustee, and Trust Principal Operating Address Change.

c. Change in Object of Trust.

d. Change in Investment from one Insurance Company to another.

e. Merger of One Trust into another.

f. Demerger of Company and Gratuity Trust.

g. Closure of Old Gratuity Trust.

h. Transfer of Funds from Old Trust to New Trust.

10. Actuarial Valuation Consultation for compliance with the following accounting standards prescribed by Indian and International Accounting Regulators for accounting and disclosures of employee benefits:

a. IAS 19 (Revised 2011) - IFRS.

b. USGAAP - ASC 715.

c. IndAS 19.

d. AS 15 (Revised 2005) for the following Employee Benefit plans:

i. Actuarial Valuation of Pension.

ii. Actuarial Valuation for Gratuity.

iii. Actuarial Valuation for Leave Encashment.

iv. Actuarial Valuation for PRMB.

v. Actuarial Valuation for Long Term Employee Benefits.

vi. Actuarial Valuation for Initial Contribution into Gratuity Trust.

vii. Actuarial Valuation for Annual Contribution Gratuity Trust.

viii. Actuarial Valuation for Pension Plan for Approval of Initial Contribution and Annual Contribution into Pension Fund for Autonomous Bodies of various Government Ministries.

ix. Actuarial Valuation for Provisioning of Gratuity for Budgeting purposes before the closure of the Calendar & Financial Year.

x. Actuarial Valuations for the merger of accounts of Indian Companies with Foreign Listed Parent Companies.

For any requirement or clarification on the above subject, you may call me at [Phone Number Removed For Privacy-Reasons] or email your query at [Email Removed For Privacy Reasons].

Our Firm Gratuity Trust Fund Consultant is an MSME registered with the Ministry of Micro, Small, and Medium Enterprises with Registration Number UDYAM-DL-11-0013795. Our consulting firm is headed by Mr. Tikaram Chaudhary, who has almost 15 years of experience and specializes in providing consultation for actuarial, legal, insurance, and investment matters related to old and new gratuity trusts as per various provisions of accounting standards (i.e., IndAS 19, AS 15 (Revised 2005), IAS 19 (Revised 2011) & USGAAP ASC 715), Indian Trust Act 1882, The Payment of Gratuity Act, 1972, The Payment of Gratuity Rules, 1973, Income Tax Act 1961, Income Tax Rules, 1962, Fourth Schedule of Income Tax Act, 1961 & relevant Acts/Rules.

Generally, gratuity trusts are formed by the most reputed Indian and multinational companies as per provisions of Part C of the Fourth Schedule of Income Tax Act, 1961, in an irrevocable system for compliance with Section 4A of the Payment of Gratuity Act, 1972, and to obtain the tax benefits available under Section 36 (i) (v) and 10 (25) (iv) of Income Tax Act, 1961.

Gratuity Trust Fund Consultant is a leading corporate consulting firm that has served more than 1000 reputed Indian and multinational companies with actuarial valuation, legal, gratuity insurance, and gratuity trust investment solutions for employee benefits (i.e., gratuity, leave encashment, pension, PRMB, etc.).

GTFC is actively involved in providing end-to-end consultation for effectively implementing accounting, actuarial, and legal compliances of the Payment of Gratuity Act, 1972, The Payment of Gratuity Rules, 1973 & accounting standards (AS 15 Revised 2005, IndAS 19 & IAS 19-IFRS) applicable to Indian and multinational establishments. The details of actuarial, legal, insurance, and investment compliances related to gratuity benefits and other defined benefits are as follows:

Gratuity Trust Solutions

The Payment of Gratuity Act, 1972, is applicable to all establishments (i.e., MNCs, schools, hospitals, NGOs, trusts, and other business entities) having more than 10 employees in the past 12 months before the balance sheet date. For the purpose of effectively implementing the Payment of Gratuity Act, 1972, the following compliances and penal provisions (i.e., refer to Section 9 in the Payment of Gratuity Act, 1972) are imposed on establishments by the competent authority (i.e., Deputy Labor Commissioner) regulating the provisions of the Payment of Gratuity Act, 1972:

a. Registration of Establishment (i.e., Submission of Form A – Notice of Opening in DLC Office)
b. Maintenance of Records Nominees of Employees in Form F (i.e., For payment of Death Gratuity)
c. Maintenance of Records other Forms as prescribed in Rule 3 to 6 of the Payment of Gratuity Rules
d. Compulsory Gratuity Insurance – Compulsorily applicable to Indian, US, UK, UAE, Japanese, European, Asian Companies registered with DLC Offices in the jurisdiction of Karnataka, Telangana, and Andhra Pradesh.
e. Establishment of the CIT Approved Gratuity Trust for Compulsory Gratuity Insurance.
f. Investment of Gratuity Trust Money into Compulsory Gratuity Insurance through Group Gratuity Schemes of Insurance companies such as:
a. SBI Life Insurance Company Limited
b. Life Insurance Corporation of India
c. Pramerica Life Insurance Limited
d. Bajaj Allianz Life Insurance Co. Ltd
e. ICICI Prudential Life Insurance Company Limited

g. The Process of Establishment of Gratuity Trust for Compulsory Gratuity Insurance requires Establishment to Involve in the following process:
I. Vetting of Board Resolution for Gratuity Trust Formation,
II. Vetting of Gratuity Trust Deed,
III. Vetting of Gratuity Trust Rules &
IV. Vetting of Application under Section 9 for Approval from CIT in terms of Rule 109 of Income Tax Rules, 1962

Furthermore, if there is any amendment in changes indicated below, then vetting of Deed of Variations and Applications to CIT are required by Trustees/Companies for taking Approvals from CIT for retention of CIT Approval for Gratuity Trust in terms of Part C of Schedule IV of Income Tax Act, 1961, for getting the tax benefits under Section 36 (i) (v) and 10 (25) (iv) of Income Tax Act, 1961 even after the following changes:
a) Change in Name of Trust,
b) Change in Address of Trust,
c) Change in Trustees,
d) Change in Investment Pattern of Gratuity Funds from one Insurer to another
e) Change in Benefit Formulae for Gratuity Benefits
f) Change in Retirement Age of Employees
g) Change in Object of Trust
h) Change in Trust Rules
i) For winding up of Trust due to the winding up of the Company
j) For Transfer of Gratuity Fund from one Trust to another in Event of Merger or De-merger

h. All matters related to Old Gratuity Trusts and Group Gratuity Schemes such as vetting work of Deed of Variations, Application, Board Resolution, and Application to Bank, LIC & CIT in various events such as Merger, De-merger, Acquisitions, etc.

For more details, contact me at [Phone Number Removed For Privacy-Reasons].