Page 83 - IC23 life insurance application

BENEFITS TO THE EMPLOYER

1. Tax Benefits: 100% payments made to LIC are treated as Management expenses

under section 36 (ii) (v) of the Income Tax Act, 1961. Further the yield available on

the contribution is not taxable under section 10 (25) (iv) of the Income Tax Act, 1961.

2) Statutory liability is booked year to year thus reflecting the true picture of the Profit

and Loss of the Organisation.

3) Gratuity payment can be made without affecting the business finances.

4) High yield depending on the size of the fund.

5) LIC assists the employer to create the trust; frame the Trust Deed and Rules

required under Income Tax. Rule 101 to claim the tax benefit since the Draft Trust

Deed and Rules have been approved by the Central Board of Direct Taxes.

6) The Actuarial valuation to assess the gratuity liability are made free of cost.

BENEFITS TO THE EMPLOYEES

1) Gratuity payments are secured.

2) In case of death of an employee, LIC pays enhanced gratuity, i.e. a Gratuity an

employee would have earned on his retirement based on his last drawn salary.

GROUP SUPERANNUATION SCHEME

Progressive Entrepreneurs have come to acknowledge that key men who are pillars

of any organisation, have vast avenues open to them, particularly in today's context

of liberalised Indian economy. In order to retain his keymen and to attract better

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