Gratuity payment

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RAvindra I.P (Querist)
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02 April 2012 Dear Sir

we are not making provision for gratuity in our balance sheet. But this year we paid gratuty to one of our retiring employee.

my question is can we expense out whole payment in this year?

CA Kishore Tallam

CA Kishore Tallam (Expert)
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02 April 2012 Yes. But as per AS 15, the Company has to make provision for Gratuity. If the number of employees are not material, provision can be made on estimation basis. Else, provision has to be made based on Actuarial Valuation.