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Gratuity Trust Services | Savlana Init
Gratuity Trust · Overview

Gratuity Trust Services — Fund It Right, Comply Every Year.

From setting up an approved gratuity trust to keeping it compliant year after year — registration, income tax approval, actuarial funding, and deed amendments, all handled by one team.

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An employer with a material gratuity liability under the Payment of Gratuity Act can choose to fund that liability through an approved gratuity trust rather than paying gratuity out of current-year cash flow as employees exit. Setting one up correctly — trust deed, trustee structure, Income Tax approval under Part C of the Fourth Schedule, and a funding arrangement with an IRDA-licensed insurer — converts an unfunded, uncertain future liability into a managed, tax-efficient fund that also gives employees more certainty their gratuity is secured.

The trust doesn't end at approval. It needs annual actuarial valuation-linked contributions, income tax return filing for the trust itself, trustee minutes and governance, and — if the employer restructures, merges, or winds down a business unit — trust amalgamation, demerger, or winding-up filings that mirror the corporate event.

This page indexes our gratuity trust services — Registration, Income Tax Approval, Trust Management, Group Trust Compliance, Annual Compliance, Amalgamation, Deed Amendments, Investment Support, Demerger, and Winding Up. Each has its own detailed page; start wherever your trust currently stands, whether that's first setup or a restructuring event.

Our Gratuity Trust Services

Gratuity Trust Registration

Setting up the trust deed, trustee board, and registration under the Payment of Gratuity Act and Income Tax Act.

Income Tax Approval (Part C, Fourth Schedule)

Obtaining Commissioner of Income Tax approval so trust contributions and income qualify for tax benefits.

Ongoing Trust Management

Trustee governance support, actuarial coordination, and annual contribution planning for the approved fund.

Group Gratuity Trust Compliance

Compliance for group/insurer-managed gratuity schemes covering multiple group companies under one master policy.

Annual Compliance Filing

Trust income tax return, trustee resolutions, and actuarial-linked contribution filing every financial year.

Amalgamation of Gratuity Trusts

Merging two or more gratuity trusts into one where group companies merge or restructure.

Trust Deed Amendments

Amending the trust deed for trustee changes, funding arrangement changes, or scheme rule updates.

Investment Support Services

Advisory on the trust's permitted investment pattern and insurer-managed fund allocation.

Our Process

1

Current Status Review

We assess whether your gratuity liability is currently unfunded, funded informally, or already sitting in an approved trust.

2

Structure or Restructure Decision

Based on the review, we recommend fresh registration, approval renewal, or a restructuring filing (amalgamation, demerger, deed amendment).

3

Documentation & Filing

Trust deed, board resolutions, actuarial reports and IT approval applications are prepared and filed as applicable.

4

Insurer/Fund Coordination

We coordinate with the IRDA-licensed insurer or fund manager handling the trust's investment corpus.

5

Ongoing Annual Compliance

Once set up, the trust is placed on our annual compliance calendar — contributions, filings, and trustee governance.

Why It Matters

✓Gratuity liability moves from an unfunded balance-sheet risk to a managed corpus
✓Employer contributions to an approved trust are tax-deductible under Section 36(1)(v)
✓Trust income enjoys exemption under Section 10(25)(iv) once approved
✓Employees gain confidence their gratuity entitlement is actually funded
✓One team coordinating trust deed, IT approval, and insurer-side documentation
✓Restructuring events (merger, demerger, wind-up) mirrored correctly at the trust level
✓Annual compliance tracked so approval status is never at risk of lapsing
✓Clear guidance on which stage — setup or restructuring — applies to your trust

Frequently Asked Questions

No, it isn't mandatory — an employer can pay gratuity as it falls due directly, or fund it informally. But once the gratuity liability becomes material, an approved trust is the standard route to fund it tax-efficiently and give employees a secured entitlement, rather than carrying it as an unfunded balance-sheet provision.
Employer contributions to an approved gratuity fund are deductible under Section 36(1)(v) of the Income Tax Act, subject to actuarial valuation limits, and the trust's own income is exempt under Section 10(25)(iv), provided the fund remains an approved gratuity fund throughout the year.
A standalone company can set up its own trust, but many smaller employers instead join a group gratuity scheme managed by an insurer, which pools administration and investment while still tracking each employer's liability separately — see our Group Gratuity Trust Compliance page for that route.
The trusts typically need to be amalgamated to reflect the merged entity, since each trust is approved against a specific employer. We handle this as a distinct filing — see our Amalgamation of Gratuity Trust page.
The trustees are legally responsible for the fund, but in practice the corpus is almost always placed with an IRDA-licensed insurer under a group gratuity policy, which handles investment and provides actuarial support, while trustees retain oversight and governance responsibility.
Annually, the trust needs an actuarial valuation to determine the contribution required, trustee resolutions approving that contribution, the trust's own income tax return, and confirmation that its investment pattern still meets the prescribed rules — see our Annual Compliance for Group Trust page for the full checklist.

Not sure what stage your gratuity trust is at?

Tell us where things stand — unfunded liability, existing trust, or a restructuring event — and we'll map out exactly what needs to be filed.

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