Income Tax Approval — Where the Tax Benefits Actually Kick In.
A registered trust deed alone doesn't unlock tax benefits — the trust must be separately approved by the Commissioner of Income Tax under the Fourth Schedule. We handle that application.
Contact UsPart C of the Fourth Schedule to the Income Tax Act governs 'approved gratuity funds' — a gratuity trust only qualifies for the tax benefits (employer contribution deductibility under Section 36(1)(v) and trust income exemption under Section 10(25)(iv)) once it is approved by the jurisdictional Commissioner or Principal Commissioner of Income Tax, following an application under Rule 109/110 of the Income Tax Rules.
The application requires the registered trust deed, trustee details, a copy of the funding arrangement (typically the group gratuity insurance policy), and confirmation that the trust's rules meet the Fourth Schedule's conditions — including that the fund is for the exclusive benefit of employees, is irrevocable, and that at least 90% of trustees are not employer-controlled in specified structures (conditions vary and are checked against the actual deed).
Approval, once granted, isn't necessarily permanent — the Commissioner can withdraw approval if the trust ceases to satisfy the Fourth Schedule conditions, which is why ongoing compliance (see our Annual Compliance page) matters as much as getting the initial approval.
Our IT Approval Services
Fourth Schedule Eligibility Review
Checking the registered trust deed and structure against Part C conditions before the approval application is filed.
Form & Application Preparation
Preparing the approval application under Rule 109/110 with the trust deed, trustee details, and funding documentation.
Jurisdictional CIT Filing
Filing the application with the Commissioner of Income Tax having jurisdiction over the trust.
Query & Clarification Response
Responding to any clarification queries the Income Tax department raises before granting approval.
Approval Order Follow-Up
Tracking the application through to the formal approval order and confirming its terms.
Approval Renewal/Continuation Advisory
Guidance on conditions that must continue to be satisfied to avoid withdrawal of approval.
Deed-Condition Reconciliation
Checking that deed terms (trustee composition, irrevocability, exclusive-benefit clause) match Fourth Schedule requirements exactly.
Withdrawal-Risk Advisory
Flagging any trust practice or event that could put existing approval at risk of withdrawal.
Our Process
Eligibility Review
We check the registered deed's clauses against Fourth Schedule Part C conditions before applying.
Documentation Compilation
Trust deed, trustee list, funding policy, and PAN details are compiled into the application package.
Application Filing
The approval application is filed with the jurisdictional Commissioner of Income Tax under Rule 109/110.
Query Resolution
Any department queries on the deed terms or funding arrangement are addressed promptly.
Approval Order & Compliance Handover
On approval, we confirm the order terms and hand the trust into our annual compliance tracking.
Why It Matters
Frequently Asked Questions
Ready to get your gratuity trust approved?
We'll check your deed against Fourth Schedule conditions and file the approval application with the correct Commissioner.
