Gratuity Management Services

Secure employee benefits. Stay legally compliant. Plan future payouts smartly.

No Hidden Charges

Lowest Price Guarantee

Talk to an Expert

Your information is safe with us. | Privacy Policy

Four Steps to Get Your Incorporation Certificate

Fill the Form

Provide business details

Add to cart

Pay the required fee online

Submit Documents

Upload required papers

Certificate delivery

Official Document Delivery

Find the best plan for your needs

Basic Plan

₹ 4,899
+GST

Standard Plan

₹ 5,999
+GST

Basic Plan
+

Premium Plan

₹ 7,499
+GST

Standard Plan
+

What is Gratuity

Gratuity is a statutory retirement benefit paid by an employer to an employee for long-term service under the Payment of Gratuity Act, 1972.

It is a financial appreciation for employees who have completed five or more years of continuous service.

Gratuity is a lump-sum amount that an employer pays to an employee as a thank you for long-term service when they leave the company.

It becomes payable when an employee:

      • Resigns
      • Retires
      • Becomes disabled
      • Passes away (to their nominee)

Eligibility:

  • Employee must complete 5 years of continuous service (not required in case of death/disability)
  • The company must have 10 or more employees
llp

Why is Gratuity Management Important

Gratuity is not just a legal rule. It’s a key part of your HR and financial planning.

Regulatory Compliance

Avoid penalties under the Gratuity Act and labour laws.

Financial Planning

Avoid sudden cash outflows at employee exit.

Employee Retention & Satisfaction

Gratuity builds long-term loyalty and a strong employer brand.

Tax Benefits

Employers can get tax deductions on contributions to an approved gratuity fund.

Need to Update

How is Gratuity Calculated

Need to Update

Gratuity = (Last Drawn Salary × 15 × Number of Years of Service) / 26

Where:

      • Salary = Basic + Dearness Allowance
      • 15 = 15 days’ salary for every completed year
      • 26 = Number of working days in a month

Example:

If an employee earns ₹30,000/month and has worked for 7 years:
Gratuity = (30,000 × 15 × 7) / 26 = ₹1,21,154

Need to Update

You Need to Know Before Managing Gratuity

Follow these simple steps to Managing Gratuity

Group 49

Gratuity is governed by:

      • The Payment of Gratuity Act, 1972
      • Income Tax Act, 1961
      • Labour Welfare Laws

Failure to comply can lead to:

      • Penalties up to ₹10,000 and additional fines
      • Imprisonment (in severe non-payment cases)
      • Damage to employer reputation

Employers can create an Approved Gratuity Trust to:

  • Manage future liabilities
  • Avail tax exemption on contributions
  • Fund gratuity payments over time

This ensures cash flow stability and peace of mind.

Required for:

      • Annual financial reporting (AS 15 / IND AS 19)
      • Calculating liability and provision in company books
      • Trust funding strategy

Actuarial valuation considers:

      • Age of employees
      • Expected years of service
      • Salary growth
      • Attrition & mortality rates

We work with certified actuaries to provide accurate, audit-ready reports.

✅ Contributions to an Approved Gratuity Fund are tax-deductible under Section 36(1)(v) of the Income Tax Act.

✅ Gratuity payments made directly from the company account (without a trust) may have limited tax benefits.

Gratuity received is:

  • Exempt up to ₹20 lakhs for private-sector employees (lifetime limit)
  • Fully exempt for government employees
  • Partially taxable if exceeding the exemption limit

We help companies and employees with tax-efficient planning and documentation.

Need to Update

Our Gratuity Management Services Include

Need to update

For Employers

  • End-to-end Gratuity Policy Design
  • Gratuity Trust Creation & Registration (with Income Tax Dept.)
  • Trust Deed & Rules Drafting
  • Actuarial Valuation Reports (AS 15 / Ind AS 19 compliant)
  • Gratuity Payment Processing & Record Keeping
  • Employee-wise Gratuity Tracking
  • Tax Planning & Advisory
  • Compliance with Labour Laws & Gratuity Act

For Employeesons

  • Gratuity Eligibility Advisory
  • Individual Gratuity Calculation
  • Tax Filing Support for Gratuity Income
  • Nominee Management Assistance

Need to update

Frequently Asked Questions

Is gratuity mandatory?

Yes, if your company has 10 or more employees.

Can an employee get gratuity before 5 years?

Only in case of death or permanent disability.

Do I need a Gratuity Trust?

Not legally, but it’s highly recommended for tax savings and financial planning.

What is actuarial valuation and is it needed every year?

Yes. It’s a certified report that estimates gratuity liability — needed annually for compliance.

Can you help set up and register a Gratuity Trust?

Yes. We handle everything — documents, submission, approval, and follow-ups.