How do I create a gratuity trust?

How do I create a gratuity trust?

(1) An application for approval of a gratuity fund shall be made in writing by the trustees of the fund to the Income-tax Officer by whom the employer is assessable and shall be accompanied by a copy of the instrument under which the fund is established and by two copies of the rules and, where the fund has been in …

What is the format of gratuity?

The formula is: (15 * Your last drawn salary * the working tenure) / 30. For example, you have a basic salary of Rs 30,000. You have rendered continuous service of 7 years and the employer is not covered under the Gratuity Act. Gratuity Amount = (15 * 30,000 * 7) / 30 = Rs 1,05,000.

Who can be trustees of gratuity trust?

Appointment of at least two Trustees is mandatory. Trustees should be resident in India. A Company can also be appointed as a Trustee only on approval of Chief Commissioner or Commissioner. Further the directors of the company can also be made trustees of the Trust.

Is audit compulsory for gratuity trust?

such there is no section which require a gratuity trust to file their audit report to income tax officer, but if audit is done in any other act then information related to that audit can be provided while filing ITR. Applicable ITR:- Gratuity.

What is Form 40C?

FORM NO. 40C [See rule 77] Application for recognition 1. Name of the Fund for which recognition under Part A of the Fourth Sche.

How do I write a letter of gratuity?

Having worked in your organization for 9 years I am entitled to receive gratuity. For your reference I have enclosed the documents in this regard. Since I have recently started my won venture, I am in need on money, thus I hereby request to please pay my gratuity as soon as possible.

How do I get a pan for gratuity trust?


  1. Copy of the Trust Deed.
  2. Copy of Trust Rules including the Schedules.
  3. Copy of Resolution approving the constitution of the Trust.
  4. Copy of the Income tax Return of the Employer for the last financial year.
  5. Copy of the PAN Card of the trust.
  6. List of all the offices and branches of the company.

Is registration required for gratuity?

There is no registration requirement. There is no registration prescribed for payment under gratuity act, 1972. However payment becomes automatically payable due to provisions of act.

Is gratuity applicable for trust?

Gratuity trust must be set up for providing gratuity benefits to the employees trust to act as a separate legal entity. The trust must get an approval from under the Income Tax Act, 1961 to be recognized as approved gratuity trust. Trustees can chose to manage the fund as per by laws of the trust.

Can gratuity trust be closed?

The Board had clarified earlier that a gratuity fund, approved under the Income-tax Act, cannot be wound up unless it is necessitated by the winding up or discontinuance of the employer’s trade or undertaking, and that the revocation of a gratuity fund cannot be permitted on the basis of a resolution of the trustees …

How to apply for trust deed under Income Tax Act?

Trust Deed along with rules and regulations mentioned in the Income Tax Act, 1961 needs to be duly signed by the trustees. Application has to be made with jurisdictional Income Tax Office for granting approval. The form for application is specified in Rule 109 of Part C of Fourth Schedule to Income Tax Act, 1961.

What is a gratuity Trust and how does it work?

An employer (company) creates a Gratuity Trust to manage the gratuity liability for its employees. The main intention for creation of a Gratuity Trust is to manage the funds contributed by the employer and to pay the gratuity amount to the employee at the time of retirement or separation.

What is variation in a trust deed?

Variation is made in Original Trust Deed. Variation is made in Original Trust Rules. Appointment of New Trustees. Variation in Original Benefits of Gratuity given by the Company in Trust Rules (i.e. Change in Ceiling Limit, Change in Vesting Condition for Gratuity Benefits, Change in Benefit Formula, etc.)

How to file an application for a trust in income tax?

The form for application is specified in Rule 109 of Part C of Fourth Schedule to Income Tax Act, 1961. This application has to be made in the name of the Trust and to be signed by the trustees. On fulfillment of all the conditions along with executed documents would form the basis of approval/ disapproval from the Income Tax Office.

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