by Gratuity is a compulsory benefit to be provided to employees as per the Gratuity Act, 1972. It is a lump sum amount paid out to employees, once they are no longer a part of the company. An employee is eligible for payment of gratuity only if he or she fulfills the conditions specified under the Gratuity Act.
Every growing organization has some financial and legal responsibilities towards its employees. Gratuity is one such significant liability paid to employees after successful 5 years completion in the company. In a way, it is a retention tool encouraging employees to stay in the organization for a longer duration. Every company has to have sufficient funds to fulfill the gratuity needs of their employees at the right time. As employee strength increases, managing gratuity payments become more expensive and unmanageable. Getting an effective gratuity plan is imperative to retain employees.
For managing your group Gratuity, you can choose from the following products:
Group Suraksha Plus: This is a Non-participating Endowment plan which provides a minimum floor rate and additional interest rate every quarter
Group Unit Linked Employee Benefit Plan: This is a Unit Linked investment plan that offers various fund options of equity and debt
Tax benefits
As an employer, annual contribution is allowed as expenditure/deduction in computing taxable income. However, maximum contribution cannot exceed 8.33% of an employee’s salary each year.
Gratuity received by the employee is tax-free up to the limit specified and subject to conditions under Section 10(10) *
The tax benefits are as per Income Tax Act, 1961 and Income Tax Rules, 1962. Please consult your Legal/ Tax expert for details. ICICI Prudential Life Insurance Company Limited shall not be held responsible in any manner in case you do not get the above stated tax benefits. Please note that the prevailing and applicable tax laws shall be final, conclusive and binding on both the parties.
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