Section 40A(7) - Provision for payment of Gratuity

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....ty is deductible only if gratuity fund is an approved gratuity fund. in other words provision for unapproved gratuity fund for meeting future liability is not deductible. The following point should be noted - * An employee retires during the current year. Gratuity is paid to him during the current year. It is deductible during the current year if no deduction was claimed earlier. * An employe....

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....n if the provision for gratuity is made as per Actuary. * If a policy is taken from LIC for providing gratuity to employees then annual premium is allowed as deduction u/s 37(1). * Premium paid to LIC for securing an insurance against liabilities arising under the Payment of Gratuity Act, 1972 is covered by the parameters of section 40A(7)(a) and not deducible. Transfer of Gratuity amount due....