Gratuity Scheme approval

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Querist : Anonymous

Querist : Anonymous (Querist)

12 February 2011 What is the reasonable time to approve the Gratuity Scheme with LIC from CIT. Contribution are made to LIC to get deduction u/s 36 of IT act Grauity Scheme should be approved

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

12 February 2011 In my view, what an employer is required from the CIT is not the Approval of Gratuity Schemes. In spite of this it would be correct to say that the employer has to get approval for the Establishment of a Gratuity Fund.
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When approval is accorded to the employer by the CIT it becomes an Approved Gratuity Fund.
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AGF's money can be invested under various schemes which have been prescribed under Rule 101 and /or Rule 67(2) which includes schemes promoted by LIC also.
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For the application of Approval the employer should immediately apply so that contribution made by him would qualify as deductible expenditure.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

12 February 2011 Please follow the link for further information

https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2001ITAct/Rules2001/mg089.htm

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