It's a PVT. LTD. Company having established in July, 2008. My query is
1. whether we require to create provision for Gratuity in our books as on 31st March, 2009.
As we have not completed even 12 months of service as on date, whereas The Gratuity Act, as far i know applicablity of that Act arises on the organisation or employees who completes 12 months of Services.
On the other hand, Gratuity liability arises only after 5 years.
Please explain the relevant provisions of Act or paragraph of AS-15 relevant to this.
If it is mandatory for our organisation to disclose that
Then I think it's sufficient without providing in the books we will disclose in the notes to the accounts such as
1. The provision for Gratuity of INR .......has not been provided in the books, the same will be booked on actual basis.
Please gives your best opinion on the same at the earliest, as it's very urgent.
CAclubindia
