Setting up of gratuity fund

Client Industry:  Education and Training

Background :

The company was mainly engaged in the advancement of both academic and vocational education and supported educational objects and activities. It was required to set up a registered gratuity fund for its employees since it had exceeded the threshold prescribed in the Gratuity Act, 1972 (‘Act’).  Thus, the client approached us for setting up of gratuity fund as per the conditions laid down in the Act. 

Our Approach :

• Our regulatory team worked jointly with the management and finance team of the client to understand whether the mandatory registration was applicable in the case
• We obtained quotation from various gratuity insurance agents based on the details of employees of client
• We formulated the trust deed required for registration of gratuity fund
• After approval of the trust deed by the management, we finalised the registration by ensuring that all the required compliances have been fulfilled
• We actively participated for obtaining the Permanent Account Number of trust from the Income-tax authorities
• We liaised with the bank for opening a new bank account in the name of trust for payment of insurance premium

 Outcome/Impact : 

We ensured the registration of trust along with fulfilment of relevant compliances within the given timeline. This, in turn, allowed the client to comply with provisions of the Act and avoid penalties.