Gratuity v/s Approved fund

[Naveen gawri]

Are We required to open Gratuity fund & Get it approved from CIT incase we have taken insurance against gratuity liability from LIC. ?

[CAGOPALJI AGRAWAL]

The contribution towards LIC gratuity fund by the employer is eligible for deduction as very well laid down in the judgement of the apex court in the case of Commissioner of Income Tax, Coimbatore Versus M/s Textool Co. Ltd. 2009 -TMI - 35070 - SUPREME COURT.

AI Summary

Company's LIC Gratuity Fund Contributions Eligible for Tax Deductions, No Additional Approval Needed Per Supreme Court Judgment A query was raised about whether a company needs to establish and get approval for a gratuity fund from the Commissioner of Income Tax if it has already secured insurance for gratuity liability from LIC. A Chartered Accountant responded, referencing a Supreme Court judgment, stating that employer contributions to an LIC gratuity fund are eligible for tax deductions.