Smart Gratuity Funding for Statutory Compliance.
Group Gratuity Insurance is an employer-sponsored policy that funds future gratuity liabilities for employees that helps organisations meet their gratuity obligations under the Payment of Gratuity Act, 1972 in a structured, tax-efficient, and risk-managed manner, instead of paying gratuity from operating cash flows at exit, employers proactively build a dedicated gratuity fund.
Employer sets up an approved gratuity trust
Funds are managed through an insurer
Annual contributions are made based on actuarial valuation
Gratuity benefits are paid to employees as and when due
Frequently Asked Questions
Is group gratuity insurance mandatory?
Payment of gratuity is mandatory; funding it through insurance is strongly recommended.
Is group gratuity tax-efficient?
Yes. Contributions are tax-deductible as per prevailing income tax provisions.
Who decides the annual contribution amount?
An actuary determines contributions based on employee data and liabilities.
Can existing gratuity liabilities be funded?
Yes. Past service liabilities can be funded through structured contributions.
