I have a query . with respect to Gratuity Trust . which has income exempt under sec 10 (25) (iv) of the Income tax act 1956.
Do these type of trust require to file return of Income ? if The answer to this question is Yes according to you ? under which section ?
Karnataka Government becomes the 3RD State to notify the requirement of Compulsory Gratuity Insurance for fulfillment of provisions of following :-
1. Sub-Section (2) & (4) of Section 4A of The Payment of Gratuity Act, 1972,
2. Subsection (5) of Section 2 Income Tax Act 1961,
3. Part C of Fourth Schedule of Income Tax Act, 1961
4. Rule 98-111 of Income Tax Rule, 1962
5. Chapter II of Indian Trust Act, 1882
6. AS 15 (Revised 2005) & IndAS 19
7. Insurance Act, 1938
The Government of Karnataka has notified above notification to ensure that there will be no default in terms of Payment of Gratuity to Private Sector employees even in case of Bankruptcy of Company as this notification specified that “Employer shall at all times maintain the gratuity trust and gratuity fund, as an Irrevocable System”
The gazetted notification is attached herewith for your kind perusal.
The Karnataka Government has notified the above Rules called “Karnataka Compulsory Gratuity Insurance Rules, 2024 (hereinafter referred as KCGIR, 2024)” on 10th January 2024. The last date for completion of compliance of KCGIR, 2024 is 09.03.2024 (i.e. 60 Days after date of notification).
Our firm GTFC - Gratuity Trust Fund Consultant has provided the end to end Consultation Services to more than 1000 Indian and Multinational Companies spread in PAN India in all Sectors of Indian Economy for Formation of Approved Gratuity Fund under Irrevocable Trust and mandatory requirements for employers to obtain insurance for the payment of gratuity to eligible employees and ensure compliance with the provisions of the Payment of Gratuity Act, 1972.
Our Consultation Services covers all the aspects (i.e. Legal, Actuarial, Insurance, Investment and Accounting) of getting the Valid Insurance within the stipulated timeline for implementation of Karnataka Compulsory Gratuity Insurance Rules, 2024. Our consultation covers:-
1. Consultation for Assessment for Applicability of KCGIR, 2024 on the establishment,
2. Consultation for Actuarial Valuation for Assessment of Gratuity Liability as per AS 15 (Revised 2005)/IndAS 19 for Initial Contribution and Annual Compliance in Balance Sheet,
3. Consultation for Formation Approved Gratuity Fund under Irrevocable system as prescribed in the KCGIR, 2024,
4. Liaison with the Leading Insurance Companies for getting the Valid Insurance like :-
a. Life Insurance Corporation of India (LIC)
b. SBI Life Insurance Company Limited
c. Pramerica Life Insurance Limited
d. Bajaj Allianz Life Insurance Co. Ltd
e. ICICI Prudential Life Insurance Company Limited
5. Consultation for Registration of Gratuity Trust in sub-registrar office and thereafter Registration of Establishment in Form I or FORM II as prescribed in KCGIR, 2024,
6. Consultation for Vetting Deed of Variations for Change in no of Trustee required by companies with Existing Approved Gratuity Fund under Irrevocable Trusts,
7. Consultation for Vetting of Application prescribed u/s Rule 109 of Income Tax Rule 1962 & Documents to obtain the CIT Approval as per provisions of Part C of Fourth Schedule of Income Tax Act, 1961,
For more details in the matter or any requirement for formation of the Gratuity Trust, you may connect us.
Our Firm “Gratuity Trust Fund Consultant” is engaged in providing to Consultancy Services to Public Sector, Private Sector and Multinational Companies for formation of Gratuity Funds as provisions of Part C of The Fourth Schedule of Income Tax Act 1961.
The most important tax benefit available to Companies of such Gratuity Trust/Fund is available under Section 36 (1) (v) of the Income Tax Act 1961, which is not available to when company made provision of Gratuity Liability in the Balance Sheet (Refer Section 47A (7) of Income Tax Act 1961).
We have almost 16 years of experience in providing above Consultancy Service. The details of Consultancy Services are as under: -
A. Formation of a New Approved Irrevocable Gratuity Trust.
B. Investment of Trust Money as per Income Tax Rules 1962.
C. Drafting of Board Resolutions Trust Deed, Trust Rules, Applications.
D. Registration of Trust Deed in Sub Registrar Office (SRO)
E. Approvals of Trust in terms of Part C of Schedule IV from Income Tax Department in following cases :-
i. Approvals for New Gratuity Trust
ii. Approvals for Change in Trust Deed
iii. Approvals for Change in Trust Rules
iv. Approvals for Change in Object of Trust
v. Approvals for Change in Trustees
vi. Approvals for winding up of Trust due to winding up of the Company
vii. Approvals for amalgamation with another fund due to merger/acquisition of Company
In case of any of requirement, you may send email at
tikaramchaudhary @ gratuitytrustfund.com, or visit our website at https://lnkd.in/dvBQAzg
Our Firm “Gratuity Trust Fund Consultant” is engaged in providing to Consultancy Services to Public Sector, Private Sector and Multinational Companies for Formation of Gratuity Trust/Fund as per provisions of the Part C of Fourth Schedule of Income Tax Act 1961 and related Services (i.e. Actuarial Valuation, Compulsory Gratuity Insurance, Gratuity Trust Management etc.)
The most important tax benefit available to Companies of such Gratuity Trust/Fund is available under Section 36 (1) (v) of the Income Tax Act 1961, which is not available to Companies when provision of Gratuity Liability is made in the Balance Sheet (Refer Section 47A (7) of Income Tax Act 1961). The details of Consultancy Services offered by us are as under: -
1. Formation of a New Approved Irrevocable Gratuity Trust,
2. Regularization of Old Gratuity Trust or Group Gratuity Scheme, Surrender of Fund,
3. Vetting of Board Resolutions, Trust Deed, Trust Rules & Application for Approval from CIT,
4. Vetting of Deed of Variations and Applications required by Trustees/Companies for Approvals from CIT for Gratuity Trust in terms of Part C of Schedule IV of Income Tax Act,1961 in following cases: -
a. Change in Name of Trust,
b. Change in Address of Trust,
c. Change in Trustees,
d. Change in Investment of Gratuity Funds from 1 Insurer to another
e. Change in Benefit Formulae for Gratuity Benefits
f. Change in Retirement Age of Employees
g. Change in Object of Trust
i. Approvals for winding up of Trust due to winding up of the Company
j. Approvals for Transfer of Fund in Event of Merger or Demerger
5. Advisory for Process, Advantages & Disadvantages for Formation of Gratuity Trust
6. Advisory for Formation/Restructuring of Gratuity Policy as per Social Security Code, 2020
7. Consultation about Statutory compliances of The Payment of Gratuity Act, 1972 as per Accounting Standards – 15 (Revised 2005) & IndAS19
8. Advisory for Accounting & Compulsory Gratuity Insurance Options for Compliance of The Payment of Gratuity Act, 1972 & *Chapter V-Gratuity of Social Security Code, 2020 (*Date for Implementation yet to be notified)
We have a Team of following Consultants with Decades of Experiences in their field and present Major Cities of India for execution of the assignments in timelines stipulated by our client:-
Ø Legal Consultants - For Legal Issues involved in Formation of Gratuity Trust
Ø Taxation Consultants - For Accounting Related Issues of Gratuity Trust
Ø Income Tax Consultants - For Documentation of CIT Approval of Gratuity Trust.
Ø Investment Consultants - For Gratuity Trust Money Investment Advisory.
Ø Actuarial Valuation Consultants - For Actuarial Valuation Reports/Certificates
Ø Merchant Bankers Consultants – For Assets Value Certification for Investment of Gratuity Trust
Other Related Services to Gratuity Trust Formation: - We also provide Services for preparation of Inputs for Preparation of Actuarial Valuation Reports/Certificates of Actuary required by Gratuity Trust of Indian, Multinational & NBFC Companies required in following events: -
(i). For Initial Funding Assessment of Gratuity and Leave Encashment Liability by Trustees,
(ii). For assessment of Accrued Liability for Gratuity and Leave Liability in following events: -
a. Transfer of Employees within a Group Company.
b. Amalgamation of 2 companies
c. Demerger of company
d. Winding of Company
(iii). For Annual Audit of Balance Sheets of Gratuity Trust as per Actuarial valuations Reports/Certificates are also required by Trustees for compliance of following Accounting Standards: -
a. For Compliance Para 120 (l) of AS 15 (Revised 2005)
b. For Full Compliance Para 120) of AS 15 (Revised 2005)
c. IndAS 19
d. IAS 19 (Revised 2011)
e. US-GAAP
In recent past we have provided our Online and offline Consultancy Services for Formation of New Trust and Matters related to Merger, Demerger, Transfer and Closure of Old Gratuity Trusts to our following clients: -
a. HIBIPL Employees Gratuity Trust
b. IIRIPL Employees Gratuity Trust
c. KDN Employees Gratuity Trust
d. TNS Employees Gratuity Trust
f. Piller Power India Pvt Ltd.
g. Tally India Solution Pvt Ltd.
i. Compact India Pvt. Ltd.
j. NNE India Ltd
k. Capsitech IT Services Pvt Ltd.
l. Aditya Infotech
m. Max Speciality Pvt Ltd
n. Surya Roshni
o. Sysmind Tech Pvt Ltd
p. NABCONS Staff Group Gratuity Trust (NABARD Consultancy)
q. Group of St. Xavier Schools
r. HIBIPL Employees Gratuity Trust
s. Blaser Swisslube,
t. Ion Group Companies & more than 1100 clients spread in all Sectors of Indian Economy.
In case of any query or clarification you may send your requirements at tikaramchaudhary @
CAclubindia
