Tag: Gratuity fund

5 issues to consider for funding a gratuity scheme

29 Oct 2025Under 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 […]

Gratuity taxation – how it applies to your company

3 Jan 2018Almost all Indian companies (more than 10 employees) pay gratuity to their employees. Since, gratuity payments are an expense to the company, companies can claim tax-deduction on the same. You can read about Payment of Gratuity Act, 1972 here.

FAQs about funded gratuity schemes

3 Dec 2017The mechanics of funded gratuity schemes remain unclear for many companies, due to a lack of regulatory framework and a general lack of understanding of actuarial principles. We have examined the issue to consider for gratuity scheme funding in our prior post. This post sets out a list of frequently asked questions about funded gratuity schemes; i.e. […]

3 issues about insurer-managed gratuity funds

2 Dec 2017Many employers choose to fund their gratuity liabilities by paying regular contributions to an insurance company. However, employers often do not fully understand what they gain from gratuity funds and what to expect from these arrangements.