Gratuity

Benefit payable in Lump sum. Contributions made by the Employer only. Actuarial Valuation Mandatory. Funding Mandatory for Tax benefits. The Payment of Gratuity Act of 1971 makes it mandatory for any organization employing more than 19 employees to provide the benefit. Gratuity is payable 15 days per year of service on the salary at the time of exit with a monetary ceiling of Rs. 3,50,000. As per Accounting Standard - 15. It is mandatory to reflect this Liability in the Annual Accounts. This Liability is required to be valued by an Actuary. Contribution to the fund up to 8.33% of annual wage-bill is allowed as tax deduction.