17 July 2012
FIrst of all, if the provision was made as per actuarial assumption, then there should not be such a big shortfall.
Is the gratuity funded or non funded?
If it is not funded, then there is no expense, the entity should debit the gratuity laibility and reduce the payment.
As far as Income tax is concerned, it should not be an issue untill auditors call it a prior period payment. Moreoever, under Tax, Gratuity is allowed on payment basis under section 43 B. Thus whatever payment made will be allowable in the yera of payment. Provisions are always discallowed.
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