Annual Compliance — The Checklist That Keeps Approval Intact.

Beyond the one-time registration and Income Tax approval, an approved gratuity trust carries a recurring annual compliance cycle. The core items are: an actuarial valuation (usually as at the financial year-end) that determines the present value of the accrued gratuity liability and the funding gap; a trustee resolution approving the employer's contribution for the year based on that valuation; the trust's own income tax return, since the trust is a distinct assessee even though its income may be exempt; and confirmation that the fund's investments still meet the pattern prescribed for approved gratuity funds.

For group trusts specifically, the annual cycle also involves reconciling each participating employer's contribution and liability separately (see our Group Gratuity Trust Compliance page), and consolidating the results into the master trust's overall annual position.

Missing or delaying any part of this cycle doesn't just create paperwork risk — a trust that stops meeting the Fourth Schedule conditions in practice (for example, contributions that consistently don't reflect actuarial recommendations, or a lapsed income tax return) can have its approval questioned. We run the full annual cycle proactively rather than reactively.