Dear Friends, Please advise me on the gratuity policy. As all of you know, we have two options:
1. Buy a group gratuity policy from insurance service providers.
2. Make provision for gratuity claims on a yearly basis in the company's books of account.
Which option is better? Our headcount is 30 and soon it will reach 50 employees.
Thanks,
Vaishali
From India, Mumbai
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1. Buy a group gratuity policy from insurance service providers.
2. Make provision for gratuity claims on a yearly basis in the company's books of account.
Which option is better? Our headcount is 30 and soon it will reach 50 employees.
Thanks,
Vaishali
From India, Mumbai
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It is always better to take a policy. it advantageous in terms of tax saving to organization also and it safe for employees also. Vinayak V Bhat
From India, Maisuru
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From India, Maisuru
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Amendment to the Act: Compulsory Insurance
The Act has been amended. See the provision below:
Section: 4A Compulsory Insurance
(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer.
However, this has not been notified yet, and we do not know when this will be notified. Definitely, taking an insurance policy will become a statutory requirement soon. Hence, it is recommended to take a policy in the initial stage itself.
Regards,
Sivasankaran
From India, Chennai
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379The Act has been amended. See the provision below:
Section: 4A Compulsory Insurance
(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer.
However, this has not been notified yet, and we do not know when this will be notified. Definitely, taking an insurance policy will become a statutory requirement soon. Hence, it is recommended to take a policy in the initial stage itself.
Regards,
Sivasankaran
From India, Chennai
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Employee reference policy.doc