LIC Group Gratuity Plan
Gratuity is a benefit which is payable under the Payment of Gratuity Act 1972. Lic
Any organisation with more than 10 employees has to pay it, as it is statutory requirement.
Gratuity is paid only to employees who complete 5 or more years with the company.
It is calculated as 15/26* Number of years of service rendered * last drawn salary.
Payment to be made within 30 days of it falls.
The common difficulties which many organisation faces which can be easily taken care by signing Lic group gratuity plan.
• Administration – Since it is a mandatory requirement every organisation has to adhere to it. In small organisation one person, as it is overburdened with managing profitability responsibility, managing gratuity too becomes difficult task plus he may not be good at managing that fund that efficiently. Thus Lic Release your employee from gratuity activity
• Administration – Since it is a mandatory requirement every organisation has to adhere to it. In small organisation one person, as it is overburdened with managing profitability responsibility, managing gratuity too becomes difficult task plus he may not be good at managing that fund that efficiently. Thus Lic Release your employee from gratuity activity
• Investment issue: There are certain protocol of managing the funds it has to be necessarily invested in the proportion and funds as directed. Many a times business are facing liquidity crunch and hence may not invest at that moment and on other times when it has surplus funds that fund may not be open for subscription. All such investment expertise Lic takes care of. As Lic has 4 lakh crore fund under its Lic group gratuity fund
• Interest rate on funds: When organization operates such fund on their own they may at times manage to get nominal return or sometime no return at all. Lic group gratuity yield 7.86% return.
• Managements of funds: In case of certain death or retirement manging to provide for such instance may be difficult but with lic it a smooth sail.
• Planned tax benefits: For small organisation rendering necessary taxation documents to claim tax rebate for funds under gratuity for income tax benefit is issue which is easily taken care by Lic by providing documents for tax rebate which is an authentic proof recognised by income tax department
• Guidance in Creation of trust. Normally group gratuity can be managed either setting provision in balance sheet for such fund or by setting aside amount each month in balance sheet or pay as it occurred all such method has its own demerits . Lic helps organisation to create trust deed and manage fund. Trust creation normally requires a charted accountant or lawyer but with Lic such things are taken care off.
• Enhanced death benefit: Assume Mr. Ajay is working with ABC consultant for a period of 10 years, his age is 40, and his current monthly salary is 100000. He met with an accident and he dies .Gratuity is calculated as 15/26 * 100000* 10=576923.
But in Lic group gratuity, Gratuity would be calculated as 15/26* 100000* 20 plus 576923. Hence family gets enhanced gratuity.
The charges levied by Lic for having such scheme is 0.5 % of yearly gratuity amount plus other charges as applicable for knowing more mail me on pritisdhadge@gmail.com
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