Advisory
services on Provident Fund, Gratuity Fund, Superannuation
Fund and Group Insurance schemes in respect
of technical, legal, taxation, documentation
and administration.
Installation
of Gratuity and Superannuation Trust Fund including
drafting of Trust Deed and Rules, Board Resolution
and Approval by Commissioner of Income Tax.
Arrange
for Actuarial Valuation certificates for Gratuity,
Pensions and Leave Encashment Liabilities.
Valuation
of liabilities done as per GAAP standard.
Review
of emoluments, benefits & recommendation
of remedial action
Assist
with quote and arrange life insurance coverage
for groups, employees and individuals.
Advise
with plan for personal accident and mediclaim
insurance and arrange for quote and cover for
groups, employees and individuals.
QUALIFIED
AND EXPERIANCED CONSULTANTS
CURRENTLY
WE WORK WITH OVER 200 EBS CLIENTS
LIST
OF EBS CLIENTS (INDIA)
LIFE
- NONLIFE INSURANCE SOLUTIONS
We
are insurance brokers with expertise in Life and
non-life related insurance. We have
a team of experts with long and varied experience
in Insurance. We can analyse existing insurance
and suggest best suited insurance plans from any
Insurance company in India.
Our
Broking services encompass the following functions:-
To
obtain detailed information of your various
business activities and discuss risk management
approach & philosophy.
To
prepare the underwriting information to
be discussed with insurance company/ies.
To
offer services in providing requisite underwriting
information as required by insurance company/ies
in assessing the risk to enable them to
offer their competitive pricing terms and
conditions for cover.
To
obtain the insurance quotations from insurance
company/ies and analyse the same for your
consideration.
To
explain and advise on appropriate insurance
covers and terms suitable for your business.
To
place insurance covers with insurance company/ies
selected by you and assist in premium payments
to the insurers.
To
study insurance policy/ies and submit Executive
Summary.
To
provide claim processing support.
To
review Insurance Programme periodically
to meet with your continuous insurance requirements
during the policy period.
To
review & discuss Insurance Programme
prior to the renewal date for smooth negotiations
with insurance company/ies.
The
Employees' Provident Funds and Miscellaneous
Provisions Act, 1952
Applicability
The
provisions of the Act apply automatically
as soon as the number of employees exceeds
19.
Financial
obligation
The
Employer is required to pay at the rate
of 12% of the salary of each employee
and also to deduct equal amount from
each employee and remit the same to
Local RPFC every month.
Procedure
Each
Employer is required to obtain Code
Number by making an
application to local RPFC.
All the forms are available and
can be obtained at the local RPFC
office.
All
employers to whom the Employees' Provident
Fund and Miscellaneous Provisions Act,
1952 applies, have a statutory liability
to subscribe to Employee's Deposit Linked
Insurance Scheme, 1976 to provide for
the benefit of Life Insurance to all their
employees. Under the Scheme, the Insurance
benefit is equal to the average balance
to the credit of the deceased employee
in the Provident Fund during the last
12 months, provided that where such balance
exceeds Rs.35, 000/- insurance cover would
be equal to Rs.35,000/- plus 25% of the
amount in excess of Rs.35,000/- subject
to a maximum of Rs.60,000/-
The
Contribution @ 0.50% of each Employee's
salary is payable by the Employer to the
Provident Fund Authorities.
We
arrange for EDLI insurance from insurers
of client's choice.
The
provisions of the Act apply to every
employer with 10 or more employees.
Financial
obligation
The
Act envisages minimum Gratuity payable
to each employee on cessation of service,
of minimum of 5 years. The Gratuity
amount is calculated at the rate of
15 days salary (a Day's salary is 1/26th
of month's salary} for each completed
year of service with a maximum amount
of Rs.3,50,000/-. However, the employer
can always give better benefits.
Funding
The
Employer has option to meet his Gratuity
liability either by managing the Gratuity
Fund by self or entrusting the fund
to Insurance Company. However, in both
the cases, the approval of CIT is mandatory.
Income
Tax Relief
Contributions
to Approved Gratuity Fund up to 8.33%
of the annual salary per employee are
allowed as expenses (salary means basic
plus dearness allowance)
Yes,
every employer is required to pay Gratuity
to it's employees in terms of The Payment
of Gratuity Act, 1972.
What
is the minimum service requirement for
Gratuity payment?
In
terms of The Payment of Gratuity Act,
1972 the employee has to complete
5 years continuous service to become
eligible for Gratuity except death
and disability.
How
is the gratuity calculated?
15
days salary (last drawn monthly salary
/ 26 days x 15 days) for every year
of completed service subject to maximum
Rs.3,50,000. However, higher benefit
can be paid if desired.
Is
Disclosure of Gratuity Liability in
Companies Books of Accounts compulsory?
In
terms of Accounting Standards 15(AS-15)
Gratuity Liability (Actuarial) is
required to be accounted/disclosed
from year to year by every company.
Why
entrust gratuity funds to Insurance
Company instead of self managed fund?
The
Gratuity Scheme with Insurance Company
frees the employer from hassles of investment
watch and adherence to Investment pattern.
In addition it provides for payment
of anticipated gratuity in case death
of an employee.
Help
the company formulate a gratuity scheme
Viz. Define benefits, contribution, formation
of non-revocable Trust and appointment
of Trustees
Prepare
draft trust Deed & Rules for approval
of the company representative
Inscribe
a Trust Deed & Rules on Non-Judicial
Stamp Paper of appropriate value as per
local laws along with a detailed letter
on company letterhead addressed to CIT
and get it executed by the Company and
the Trustees.
Receive
and submit certified copies of the executed
Trust Deed & Rules for approval to
CIT.
Follow-up
with CIT until approval is received including
drafting of Deed of Variation as suggested
by the CIT, if any.
Provide
administrative guidelines as to opening
of Bank A/c. in the name of the Trust,
payment to Insurance Company etc.
Co-ordinate
between insurer and the Company to install
the scheme.
In
era of decreasing interest rates the normal
retirement benefits fail to compensate the
drop in income on retirement. A pension benefit
is an excellent tool of post retirement planning.
Benefit of pension provides for long term
financial security and boosts the sense of
loyalty and pride in continued association
among the employees.
Provisions
This
is not a statutory liability but generally
provided to Senior employees who do
not come under the purview of the Payment
of Bonus Act.
Financial
The
employer can contribute to the extent
of 15% of the salary (i.e. such contribution
alongwith PF contribution should not
exceed 27% of the salary} Since the
benefit is voluntary, it can also
be contributory by employer and employee
and can be with certain restrictions
as to eligibility conditions.
Funding
The
employer has an option to privately
manage the Fund or go to Insurance Company.
However, in both cases, approval from
CIT is necessary to get contribution
as tax-deductible expenses.
What
are the Tax implications of contribution
to Pension Fund?
Subject
the Pension Fund having been approved
by the CIT, the contribution by employer
is allowed as business expenses and
the contribution by employee is eligible
for tax benefit under Sec.88
Is
the Pension Taxable?
Yes,
Pension is taxed just like salary
and is also eligible for Standard
deduction
Can
the fund transferred to new employer?
Yes,
subject to the new employer having
a pension fund and having a provision
to receive equitable contribution.
On
cessation of employment can part of
the fund encashed?
Yes
1/3 of the pension can be commuted
and is tax-free, subject to certain
conditions
Pension
once started, can the same change with
the change in interest rate?
No,
currently pension is required to be
purchased from an Insurance Company
and does not change with the interest
rate in the market.
Help
the company formulate a pension scheme
Viz. Define benefits, contribution, formation
of non-revocable Trust and appointment
of Trustees
Prepare
draft trust Deed & Rules for approval
of the company representative
Inscribe
a Trust Deed & Rules on Non-Judicial
Stamp Paper of appropriate value as per
local laws along with a detailed letter
on company letterhead addressed to CIT
and get it executed by the Company and
the Trustees.
Receive
and submit certified copies of the executed
Trust Deed & Rules for approval to
CIT.
Follow-up
with CIT until approval is received including
drafting of Deed of Variation as suggested
by the CIT, if any.
Provide
administrative guidelines as to opening
of Bank A/c. in the name of the Trust,
payment to Insurance Company etc.
Co-ordinate
between insurer and the Company to install
the scheme.
The
Privilege / Earned Leave to the credit of
an employee is normally allowed to be cashed
based on last drawn salary. This being a long
term liability of the employer a few of the
insurance companies offer scheme where the
employer contributes to scheme year to year
and make a claim on cessation of service of
an employee from the insurer.
Further, as per Accounting Standard AS-15,
Leave Encashment Liability is required to
be valued Actuarially every year and to be
disclosed in books of accounts. Separate funding
is not necessary.
Frequently
asked questions:
Tax
implications of Leave Encashment?
Any
leave encashed during the service
is taxable as salary whereas leave
Encashment amount received on retirement
is tax-free subject to certain conditions.
Can
the employer claim provision / contributions
towards leave encashment liability as
business expenses?
No.
However, the actual payment of leave
encashment is allowed as business
expense.
Is
provision / disclosures of leave encashment
liability mandatory?
Life
Insurance is a product, which offers protection
against risk of death. In case of death, the
full sum assured is made available under a
life assurance policy, whereas under other
savings schemes, the total accumulated savings
alone will be available.
Life
Insurance can also be used as a means of
saving for one's future. There are a number
of Life Insurance products, which in addition
to life cover also provide the means of
investing one's income. The sum as per the
policy will be received only after a period
of time. This amount thus provides for old
age.
Life
insurance brings about forced savings. Payment
of life insurance premiums is compulsory
and becomes a habit. Savings in other schemes
can be easily withdrawn and may be used
for less worthy purposes. Termination of
a life insurance policy usually results
in a substantial loss in benefits. One is
thus encouraged to save and keep one's policy
alive
In
certain cases, the object of insurance may
be to serve as security to educational funds
in respect of loans advanced for educational
purposes or to provide donations to charitable
institutions like hospitals & schools
After
a period of 3 years, if the policyholder
finds that he is unable to continue payment
of premiums he can surrender a policy for
a cash sum. A life insurance policy is acceptable
as a collateral security for a personal
loan by financial institutions. A policyholder
can take a loan from his insurance company
against the security of his life insurance
subject to certain conditions
The
Indian Income Tax Act provides tax concessions
to the policyholder both on payment of premium
and on the maturity amount.
The
basic idea behind a Life Insurance
is Human Life Value In simple terms
insurance should be sufficient to
sustain the standard of living of
the dependants on Life Assured's Death.
Say 12 to 15 times of an individuals
annual income is ideal.
What
are the basic products of life insurance?
Term
(only Risk Cover), Endowment (Risk Cover
plus bonus), Investment Liked Endowment(
Risk Cover plus market linked investment
returns) and Personal Pension
Is
surrender Value Taxable?
Surrender
value under a Life Insurance Policy
with risk cover element is normally
not taxable
Can
a life insurance policy be attached
by a court of law?
Yes,
except that taken under Sec. 6 of The
Married Women's Property Act, 1874.
Can
an individual propose insurance on the
life of a family member?
Yes,
spouse, children & dependent minor
brothers & sisters.
Key-Man
Insurance (KMI) is a concept in business
insurance. It is the insurance taken by
a company on the life of an employee in
order to protect the company against the
financial loss, which may occur from the
employee's premature death.
Premiums
paid by a company under a Keyman Insurance
Policy qualify as eligible business expenses
under Sec. 37(1) of the Income Tax Act 1961.
Premiums
paid by the company are not treated as perquisite
in the hands of the Keyman.
KEYMAN
INSURANCE A Bonanza to Corporate Sector.
The
company is protected against the financial
loss in the event of KM's death.
The
Company is able to create an asset
for itself in the form of premiums
paid and added bonus.
It
gives a substantial Income Tax saving
to the company.
It
protects the interests of the other
employees, salesmen, shareholders
and customers and keeps the company
position stabilised in the market.
It
generates confidence, sense of security
and loyalty in the mind of the KM.
It
is not necessary that the KM is the
single most important employee of
the company. There can be number of
KM's in a company depending upon their
technical knowledge, experience, entrepreneurial
vision and talents in the context
of their contribution to the success
of the company.
Is
maturity amount taxable?
Yes,
maturity proceeds are included &
taxed under the Head "Income from
Business / Profession".
What
happens when a keyman leaves the job?
The
policy can be transferred to the new
employer or assigned to the keyman or
surrendered for cash value.
Can
a partnership or a proprietary firm
have a Keyman Insurance?
Active
partners are source of profits of the
firm. The absence of such partners may
cause significant loss to the firm.
Therefore, Keyman insurance on the lives
of active partner is allowed subject
to certain conditions. However, keyman
policy to a proprietor is not allowed.
Can
this be taken on any employee of the
company?
Key-Man
(KMI) is an Employee / Director of a
company whose services have significant
effect on the profitability of the company
and whose premature death will adversely
affect the profitability of the company.
Key Man Includes Key-Woman.
With
increased longevity, man's retired life
is nearly half of his actual life &
to ensure a pleasant life after retirement,
provisions ought to be made when you are
young.
You
may be self-employed, a chartered accountant,
engineer, doctor, architect or any other
professional performing successfully. But
things may not remain same, and continuing
prosperity can't be guaranteed. If you can
make a small monthly contribution, which
you can easily afford now you will build
a substantial pension for yourself and for
your family and you could be self-dependent
even after superannuating.
Even
if you are salaried person you need it.
Though you may carry home a lump sum by
way of retirement benefits/ accretion of
any other kind, the same can be frittered
away & soon you may have no doors to
knock on.
In
today's world dependence on relatives and
friends are difficult to imagine. And any
other source of income is hard to come by.
So start building your pension benefits
brick by brick. A small sacrifice today
will result in greater family and old age
pension benefits.
Premium
paid up to Rs.10, 000 p.a. is exempted from
income tax as per Section 80CCC. Similarly
Commuted Value of 25% received in one lump
sum at the start of the pension is also
exempted from Income tax. However, the amount
of monthly Pension as & when received
is taxable.
What
happens if death occurs before start
of pension?
The
single/ instalment premium /contribution
is returned to the person claiming the
money with interest and or bonus if
any.
Once
the pension has started will the amount
of pension change with the change in
interest rates in the market?
No.
The pension instalment once fixed will
not change.
Can
the pension be extended to family members
on the death of pensioner?
No,
the pension benefit can not be extended
to family members on death of a pensioner.
However, a choice of selecting joint
life and last survivor pension is available
at the inception.
How
early one can start saving for pension?
From
age 18. The compounding interest effect
will be multi-fold.
Group
(Term) Insurance Scheme is meant to provide
life insurance protection to groups of people
at a very low cost. Under Group (Term) Insurance
Scheme, life insurance cover is allowed
to all the members of a group subject to
some simple insurability conditions without
insisting upon any medical evidence. The
restrictions under a Group Term Insurance
Scheme mainly relate to size of the group,
amount of cover allowable, minimum and maximum
age limit for eligibility of cover (normally
18 and 60), participation of minimum percentage
(say 75%) of eligible members of the group
at inception and compulsory participation
of all new members.
Personal
Accident Insurance provides compensation
for loss of life or injury (partial or permanent)
caused by an accident. The policy is open
to all age groups (6 months to 70 years)
and the principal sum chosen could vary
from Rs.1 lac to Rs.1 crore based on the
monthly income
Depending
on the size of the group a handsome discount
is available.
Frequently
asked questions:
Is
there any geographical limit on PA policy?
No,
the PA cover is worldwide.
Can
time restricted cover be granted under
a group PA policy?
Yes,
in employee- employer group.
Are
hospital bills due to accident also
covered?
Yes,
by payment of additional premium limited
to 25%/50% of claim amount.
Is
there any tax benefit?
Yes
the employer can claim the premium paid
as business expenses.
Is
snakebite or slipping on floor considered
as accident?
In
the unfortunate event of you or your family
members meeting with an illness or accident
resulting in hospitalisation, Health Insurance
gives you a cash free hospitalisation in
hospitals across India. Health Insurance
also reimburses the expenses during Pre-Hospitalisation
and Post-hospitalisation stages of treatment
up to certain period.
In
case of a Group even the maternity benefit
can be covered unlike Individual policy
by payment small additional premium.
Does
this policy have any geographical limitations?
Yes,
the cover is available inside the
geographical boundaries of India.
Does
premium paid enjoy any tax concessions?
Yes,
premium paid by an individual under
a mediclaim policy is tax deductible
under Sec 80 (D). and premiums paid
by employer under a group policy are
allowed as business expenses.
Can
pre existing diseases be covered?
Yes,
by payment of additional premium under
group health and subject to lien for
some years under individual health policy.
Are
dental expenses covered under the policy?
Dental
expenses incurred other than due to
accident are not covered.
Can
the policy be transferred from one insurer
to another insurer on renewal?
Yes.
This being a one-year's renewable contract
it can be taken from different insurer
at the time of renewal.
The
Travel Health Insurance policy compensate
for the various perils that a traveller
is exposed to whilst travelling outside
India. The policy covers future unforeseeable
events and not events that have happened
and are still happening or are showing possibility
of happening again before the inception
of the insurance.
The
cover becomes operational when the insured
first crosses the Indian border in the course
of the overseas travel.
Frequently
asked questions:
How
is the claim settled in foreign countries
when the policy is issued in India?
An
overseas TPA backs the insurance.
TPA provides a 24-hour hotline. Upon
contact TPA arranges & services
emergency Hospitalisation needs during
travel anywhere as per policy cover.
Can
pre existing diseases be covered?
No.
Can
the period of cover be extended?
Yes,
maximum up to 180 days
Is
refund of premium available on early
return to India?
