Gratuity Trust Overview — Structured. Funded. Compliant.
Advisory on setting up and running an approved gratuity trust - how it works, the tax treatment involved, and the obligations that come with it.
Book Free ConsultationAn approved gratuity trust is a separate fund an employer sets up to meet its gratuity liability towards employees, rather than paying gratuity out of current-year profits when it falls due. Once approved by the tax authority, contributions to the fund and the fund's own income receive specific tax treatment.
At N D Savla & Associates, we advise employers in Nashik and across Maharashtra on whether an approved gratuity trust is the right structure, and what setting one up and running it actually involves before they commit.
Many employers underestimate the ongoing obligations that come with a trust - annual actuarial valuation, trustee governance and separate accounting among them. We set expectations upfront so the decision to set one up is made with the full picture.
Our Services
Suitability Assessment
Assessing whether an approved gratuity trust suits the employer's size, headcount and existing gratuity arrangement.
Structure Explanation
Explaining how the trust, trustees, actuary and (where used) insurer fit together in practice.
Tax Treatment Guidance
Guidance on the tax treatment of employer contributions and the trust's own income once approved.
Trust vs Group Scheme Comparison
Comparing a self-administered trust against a group gratuity scheme run through an insurer.
Governance Requirements
Outlining the trustee, meeting and record-keeping requirements that come with running a trust.
Funding Pattern Overview
Explaining how the funding requirement is arrived at through periodic actuarial valuation.
Transition Planning
Advising employers moving from an unfunded gratuity liability to a funded, approved trust.
Ongoing Advisory
Continuing advisory as the trust operates, including on amendments, mergers or closure.
Our Process
Current Position Review
We review the employer's existing gratuity liability, employee strength and any current funding arrangement.
Options Discussion
The trust route is compared against alternatives such as a group insurance scheme, with the trade-offs explained.
Decision Support
We help the employer arrive at a decision, factoring in cost, administration and long-term commitment.
Handover to Setup
Where a trust is chosen, we hand over into registration and income tax approval as a next step.
Ongoing Advisory Relationship
We remain available for questions on funding, compliance and governance as the trust runs.
Why It Matters
Frequently Asked Questions
Considering an approved gratuity trust?
Share your current gratuity arrangement and headcount - we'll walk you through whether a trust is the right fit.
