Superannuation fund taxation from employer’s perspective

Employee benefit

Before we start with taxation on superannuation fund, let us understand what exactly is a superannuation fund. Makes sense, so what is superannuation fund ? Cambridge dictionary defines “superannuation” as “money that people pay while they are working, so that they will receive payment when they stop working when they are old, or the payment they receive when they stop working” So, in simple words, superannuation funds refer to the […]

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5 issues to consider for funding a gratuity scheme

Issues to consider for funding a gratuity scheme

Under the right circumstances, a decision for funding a gratuity scheme could deliver significant benefits to the companies. Gratuity is a statutory benefit – employers are required to pay a lumpsum benefit to their employees who have served for at least five years. The lumpsum is generally calculated as 15 days of eligible salary for […]

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4 issues about actuarial valuation of leave schemes

actuarial valuation of leave schemes

Treatment of leave schemes under AS 15 and Ind AS 19 is widely misunderstood. Companies end up spending resources on actuarial valuation of leave schemes that may not require any, while fail to identify schemes that may require one. Background Companies run several types of leave benefit schemes for their employees. Privilege leaves (also known as earned or […]

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4 ways in which Ind AS 102 can affect your company

4 ways in which Ind AS 102 can affect your company

Ind AS 102 will bring much needed uniformity in valuation and accounting of share-based benefits. However, the cost for the affected companies is likely to increase significantly. What Ind AS 102 is all about? Ind AS 102 prescribes financial reporting in respect of share-based benefits and is relevant for companies which remunerate their employees by share-based (or stock option) […]

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6 reasons why your pension reporting under IAS 19 may not be correct

IAS 19 - why your pension reporting may not be correct

Actuarial valuation and reporting of a pension scheme under IAS 19 is significantly more complex than other employee benefit plans. Several issues, which after often ignored, need to be understood and allowed for when reporting for pension schemes.

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Discount rate for actuarial valuation as at 31 March 2018

Discount rate for actuarial valuation 31 March 2018

It is the end of another financial year and time for companies to prepare their year-end financial statements for FY 2017-18. The discount rate for actuarial valuation as at 31 March 2018 is now known. This post explains the movement in the interest rate curves over the FY 2017-18 and how that is expected to […]

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Increase in gratuity limit to Rs 20 lakhs | Regulatory update

impact of increase in gratuity limit

The amendment to Payment of Gratuity (PG) Act, 1972, has finally come into force with the notification in the Gazette of India on 29 March 2018. This amendment has led to an increase in gratuity limit to Rs 20 lakhs, from Rs 10 lakhs earlier. The timing of this notification means that companies will need […]

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Applicability of actuarial valuation on leave schemes

is actuarial valuation mandatory for leave encashment

Companies often ask us if an actuarial valuation mandatory for leave schemes. It is clear that accounting and audit professionals require some additional guidance on this matter. In this post, we aim at addressing this issue. The short answer is, an actuarial valuation will be applicable if your company offers leave benefits that would require […]

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Applicability of actuarial valuation on gratuity scheme

applicability of actuarial valuation

All kinds of businesses, in whatever form and size, have expressed a desire to understand the regulatory framework under which actuarial valuations are performed. This is especially true for the most common benefit in India – the gratuity scheme. This blog explains the applicability of actuarial valuation of gratuity under different instances. But before diving into the […]

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Actuarial valuation of gratuity – sensitivity to assumptions and employee profile

actuarial valuation of gratuity sensitivity

What are the factors that will have an impact on the actuarial valuation of gratuity liability? What will be the magnitude of this impact? How will the gratuity liability impacted if the government increases gratuity limit to ₹20 lakhs? These are questions about the actuarial valuation of gratuity which almost every company’s management team wants […]

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