BENEFITS TO EMPLOYER
1. annual contribution upto 8.33% of the salary bill in a financial year is allowed a deduction for the purpose of computation of taxable income.
2. Contribution towards past service liability is allowed as deduction as per the income tax rule.
3. Interest income received from the trust is exempt from income tax. (section -10(25).
BENEFITS TO EMPLOYEE
1. The contribution made by the employer is not included in the value of taxable prequisites in the hands of the customer.
2. Gratuity received upto 350000 is exempt from income tax under section 10(10).
Amount received by the beneficiaries on the death of employer is not taxable.
LIFE COVER- AN ADDED BENEFIT
-In the event of Pre-mature un fortunate death,a sum equal to gratuity payeble in respect to the entire service (actual and future can be paid)
- Life cover is restricted to the limit as specified by the insurence company.