Dear Friends,
Please advise me on gratuity policy. As all of you know, we have two options:
1. buy group gratuity policy from insurance service providers
2. make provision for gratuity claims on yearly basis in companies books of account.
Which option is better? Our headcount is 30 and soon it will reach to 50 employees.
Thanks
Vaishali
From India, Mumbai
Please advise me on gratuity policy. As all of you know, we have two options:
1. buy group gratuity policy from insurance service providers
2. make provision for gratuity claims on yearly basis in companies books of account.
Which option is better? Our headcount is 30 and soon it will reach to 50 employees.
Thanks
Vaishali
From India, Mumbai
It is always better to take a policy. it advantageous in terms of tax saving to organization also and it safe for employees also. Vinayak V Bhat
From India, Maisuru
From India, Maisuru
The Act has been amended See provision below
Section: 4A
Compulsory insurance
(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:
However, this has not been notofied yet and we do not know when this will be notified. Definitely, taking an Insurance Policy will become a statuory requirement soon Hence it is recommended to take a policy in the initial stage itself.
Sivasankaran
From India, Chennai
366Section: 4A
Compulsory insurance
(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:
However, this has not been notofied yet and we do not know when this will be notified. Definitely, taking an Insurance Policy will become a statuory requirement soon Hence it is recommended to take a policy in the initial stage itself.
Sivasankaran
From India, Chennai
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A - Group Gratuity offer letter 2010-11 (2).doc
FORM-F-NOMINATI ON OF GRATUITY.pdf