Tax treatment of Expense/Income as per LIC Gratuity Fund

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Neethu Therese (Querist)
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07 September 2023 Our company has opened a Group Gratuity Fund with LIC for disbursement of Gratuity to employees. LIC gratuity A/c and Gratuity Bank A/c are maintained in the books of the company itself. Each year, Gratuity provision and fund balance are adjusted in the books as per the actuarial valuation statement received from LIC.

Issue : What is the tax treatment of income/expense recorded in the books which has been accrued as per the actuarial valuation statement from LIC ?. For example, if we account Rs.5 lakhs as income recognised as per LIC actuarial valuation statement, whether that income can be reversed in the tax computation? or the same needs to be reported as the income of the company?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 September 2023 The same needs to be reported as the income of the company

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Tax treatment of Expense/Income as per LIC Gratuity Fund

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