Group Gratuity Scheme
Group gratuity schemes cover gratuity benefits as well as provide protection to the family through life insurance cover in the unfortunate event of death.
Investment of gratuity fund is for long terms, can be either in a traditional portfolio or market-related portfolio or in balance port with the objective to maximize the returns and in turn, reduce business costs. A good plan will help you to reward your employees without any financial issues in your business.
Add on covers – The scheme can be enhanced with some rider plans to cover accidental death benefits, accidental disability benefits. This could be structured as a supplementary scheme.
Extends tax relief to the employer & employee – The annual gratuity contribution by an employer is treated as a business allowable expenditure while calculating tax liability; Income from gratuity is exempted from tax, at the hand of employees, up to the limit specified and subject to conditions under section 10(10), Income Tax Act, 1961.
Exclusions – There are no specific exclusions under the group gratuity insurance policy. But the exclusions can be built into the scheme in specific cases like intentional self-injury, attempted suicide, etc.