Let us understand first what is Gratuity and is gratuity taxable? Gratuity payment is made by the employer as a mark of recognition of the service completed by the employee to the Company. Gratuity is a statutory benefit to be provided to an employee as per the Payment of Gratuity Act, 1972. It is a lump sum amount paid out to an employee, upon his exit from employment and fulfilling the criteria prescribed in the gratuity Act.
These statutory payments to employees create a gratuity liability for you as an employer. As an employer, one of your paramount concerns will be availability of sufficient funds to meet your company’s obligation for these gratuity payments. Insurance Manager offers its Group Gratuity insurance to enable employers to meet their gratuity liability in a very simple and efficient manner. Group Gratuity Plan also ensures confirms highest level of safety for the total amount and stability in future contributions. The purpose of a gratuity insurance is to provide the employees a lump sum benefit called gratuity, after they have put in the minimum required years of service as specified in the Group Gratuity Scheme Rules, on their exit from service due to:
Permanent total disablement whilst in service.
Death whilst in service due to accident or natural causes.
Resignation/Termination from service.
However, the minimum required year of services shall not apply in case of death and disablement of the employee due to accident or natural causes.
Group Gratuity Benefits
Better returns > Higher Corpus > Reduce liability
Multiple Investment Options – Choice of multiple funds with a flexible investment pattern. Choice of more than 5 fund options
Switching Option – While you have chosen a fund option, you have the flexibility of switching between our various funds at any time. Switching between the various funds is allowed depending upon your requirements. We allow unlimited switches free of cost every year.
Contribution Redirection – The contributions can be redirected for investments into fund/s of your choice and need not adhere to the initial investment pattern. We allow unlimited redirection requests free of cost.
Transparency – Portfolio Disclosure of the funds is done on a Quarterly basis. This enables you to achieve better fund management. Transparency in charges, investments & returns –periodic statements, internet access & NAV based returns
Tax Benefit -Tax benefits are as per the provisions of the Income Tax Act, 1961. Tax laws are subject to change.
Expert Management-In house fund management team –experience in fund management
Savings in manpower cost as Gratuity Funds Management/ paperwork is done by the Insurer
Benefit of ‘Rupee cost averaging’ on account of periodic inflow of gratuity contributions into the funds
Life insurance coverage for employees
Apart from Gratuity benefit, employees are entitled to life insurance coverage that will be payable to their families in the unfortunate event of their death.
Market-linked returns and long-term investment growth
Investing your gratuity fund in a unit-linked investment portfolio exposes you to a variety of market instruments. A gratuity plan like this enables you to reward your talented and loyal employees without putting a financial stress on your core business in the long run.
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