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Does your Company have enough funds available?
The Comprehensive Gratuity Scheme, offers you a Managed Trust that fulfils all your employee gratuity obligations. With this scheme you are able to:
- Plan design and advice on Trust Formation/Deed of Variation.
- Actuarial valuation as per internationally accepted practices on the policy anniversary every year.
- Scheme registration and ongoing legislative compliance.
- Investment management and reporting to trustees.
- Administration services and benefit payments.
How to avail of Gratuity Scheme:
Employer/Trustee of the Gratuity Scheme shall fund for gratuity liability by:
- Remitting the recommended contribution for the past service and an annual contribution for the future service as per the actuarial valuation provided by Tata AIG Life.
- Transferring existing assets if any to Tata AIG Life Gratuity Scheme based on mutually agreed asset valuation.
Enhanced Death Benefit:
As part of the Comprehensive Gratuity Scheme, an additional benefit of life insurance cover is included.
In the unfortunate event of a serving employee’s death, the coverage would provide for a lump sum payment equal to:
- The Future Service Gratuity (i.e. Total Service Gratuity less Accrued Service Gratuity).
- A flat benefit amount determined at the inception and subsequent renewal of the coverage subject to a minimum of Rs.1,000/-.
Tax Benefits for the Employer*:
- Past Service Contribution is allowed as deductible business expense to the extent of 8.33% of the member’s salary during the each year of employee's past service. (Rule 104).
- Contributions up to 8.33% of the employee’s salary is allowed as deductible business expense u/s 36(1)(v).
- Interest Income on the fund is tax free u/s 10(25)(iv).
Tax Benefits for the Employee*:
- Gratuity paid is tax free up to half a month’s salary for every completed year of service or Rs. 3.5 lakhs, whichever is less u/s 10(10).
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