Income Tax Act, 2025
Section 4: Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 11988).
4. Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 11988).
5. Subs by Act 42 of 1970, s. 57, for “and of the accounts of the fund for the last year for which such accounts have been
made up” (w.e.f. 11971).
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5. Gratuity deemed to be salary.—Where any gratuity is paid to an employee during his lifetime,
the gratuity shall be treated as salary paid to the employee for the purposes of this Act.
6. Liability of trustees on cessation of approval.—If a gratuity fund for any reason ceases to be an
approved gratuity fund, the trustees of the fund shall nevertheless remain liable to tax on any gratuity paid
to any employee.
7. contributions by employer, when deemed to be income of employer.— Where any
contributions by an employer (including the interest thereon, if any) are repaid to the employer, the
amount so repaid shall be deemed for the purposes of income-tax 1*** to be the income of the employer
of the previous year in which they are so repaid.
8. Appeals.—(1) An employer objecting to an order of the 2[3[Principal Chief Commissioner or Chief
Commissioner] or 4[Principal Commissioner or Commissioner]] refusing to accord approval to a gratuity
fund or an order withdrawing such approval may appeal, within sixty days of such order, to the Board.
(2) The appeal shall be in such form and shall be verified in such manner and shall be subject to the
payment of such fee as may be prescribed.
5[8A. Particulars to be furnished in respect of gratuity funds.—The trustees of an approved
gratuity fund and any employer who contributes to an approved gratuity fund shall, when required by
notice from the 6[Assessing Officer], furnish within such period, not being less than twenty-one days from
the date of the notice, as may be specified in the notice, such return, statement, particulars or information,
as the 6[Assessing Officer] may require.]
9. Provisions relating to rules.—(1) In addition to any power conferred in this Part, the Board may
make rules—
(a) prescribing the statements and other information to be submitted along with an application for
approval;
(b) limiting the ordinary annual and other contributions of an employer to the fund;
7[(bb) regulating the investment or deposit of the moneys of an approved gratuity fund:
Provided that no rule made under this clause shall require the investment of more than fifty per
cent of the moneys of such fund in Government securities as defined in section 2 of the Public Debt
Act, 1944 (18 of 1944);]
(c) providing for the assessment by way of penalty of any consideration received by an employee
for an assignment of, or the creation of a charge upon, his beneficial interest in an approved gratuity
fund;
(d) providing for the withdrawal of the approval in the case of a fund which ceases to satisfy the
requirements of this Part or the rules made thereunder; and
(e) generally, to carry out the purposes of this Part and to secure such further control over the
approval of gratuity funds and the administration of gratuity funds as it may deem requisite.
(2) All rules made under this Part shall be subject to the provisions of section 296.
An employer objecting to an order of the 2[3[Principal Chief Commissioner or Chief
Commissioner] or 4[Principal Commissioner or Commissioner]] refusing to accord approval to a gratuity
fund or an order withdrawing such approval may appeal, within sixty days of such order, to the Board.
The appeal shall be in such form and shall be verified in such manner and shall be subject to the
payment of such fee as may be prescribed.
5[8A. Particulars to be furnished in respect of gratuity funds.—The trustees of an approved
gratuity fund and any employer who contributes to an approved gratuity fund shall, when required by
notice from the 6[Assessing Officer], furnish within such period, not being less than twenty-one days from
the date of the notice, as may be specified in the notice, such return, statement, particulars or information,
as the 6[Assessing Officer] may require.]
9. Provisions relating to rules.—
In addition to any power conferred in this Part, the Board may
make rules—
prescribing the statements and other information to be submitted along with an application for
approval;
limiting the ordinary annual and other contributions of an employer to the fund;
7[
regulating the investment or deposit of the moneys of an approved gratuity fund:
Provided that no rule made under this clause shall require the investment of more than fifty per
cent of the moneys of such fund in Government securities as defined in section 2 of the Public Debt
Act, 1944 (18 of 1944);]
providing for the assessment by way of penalty of any consideration received by an employee
for an assignment of, or the creation of a charge upon, his beneficial interest in an approved gratuity
fund;
providing for the withdrawal of the approval in the case of a fund which ceases to satisfy the
requirements of this Part or the rules made thereunder; and
generally, to carry out the purposes of this Part and to secure such further control over the
approval of gratuity funds and the administration of gratuity funds as it may deem requisite.
All rules made under this Part shall be subject to the provisions of section 296.