It calls for long-term strategic planning and research to decide whether to fund gratuity liabilities. There are sundry issues that need to be taken into account. Here’s a rundown of 4 key “generic” issues, which actuarial companies in India believe are relevant to most companies as they contemplate funding their gratuity schemes. 1. Tax Benefits When an employer funds its gratuity scheme, it can get the following three benefits. · An amount equal to 8.33 percent of the sum total of all basic salaries paid by the company into its gratuity fund will be considered as a tax-deductible expense. · In case, the company is funding its gratuity liabilities for the first time, a dispensation amounting to 8.33 percent can be paid into the gratuity fund in the form of tax-deductible outlay for all the past years of an employee’s service. · The income earned as an interest or through an investment within the gratuity fund is exempted from any tax ded