Category of

Risks / Needs
Death

Group
Life

Group
Acc.

Disability

Medical expenses

Medical
Expense

PF

Retirement

Capital
Accumulation

Category of
Risks / Needs
Death

Group
Life

Group
Acc.

Disability

Medical expenses

Medical
Expense

PF

Retirement

Capital
Accumulation

Particulars

Gratuity (DB)

Provident Fund
(DC)

Contribut ion by Benefit to

employer
employer

Benefit to
employee

Allowed as deductible
expense (upto
8.33% of basic salary)

Allowed as deduct
expense (upto
10% of basic) sub
to a max Rs.
100,000

Not included in taxable

income

Not included in
taxable income

Particulars

Gratuity (DB)

Provident Fund (DC

Contributi on by Benefit to
employee
employee

If any, included in
taxable income

Included in taxable

At time of profit Benefit to

credit
employee

No taxability on
employees

No taxability on em
(subject to a ceiling
rate of income bein
credited)

Particulars
At time of
redempti on /
payment of
accumula ted
balances

Gratuity (DB)
Benefit to
employ ee

Payments from approved funded

scheme are fully exempt.
Payments from approved
unfunded scheme are exempt
upto Rs. 200K.
Payments from unapproved
unfunded scheme are exempt
upto Rs. 75K

PF

Gratuity

Pension

Benevolent
Funds

PF

Gratuity

Pension

Benevolent
Funds

Provident Fund
(DC)

Pension (DB)

VPS (DC)

Allowed as deductible Allowed as deductible expense Allowed as deductible

expense (upto
(upto
expense (upto
10% of basic) subject 20% of basic)
20% of basic)
to a max Rs.
100,000

Not included in
taxable income

Not included in taxable income Included in taxable

income, tax credit
allowed on
same

Provident Fund (DC)

Pension (DB)

VPS (DC)

Included in taxable income

If any, included in taxable

income

Tax credit allowed

subject to certain
restrictions

No taxability on employees
(subject to a ceiling on the
rate of income being
credited)

No taxability on employees

No taxability
on employees

Provident
Fund (DC)

Pension (DB)

VPS (DC)

Accumulate d
balance payable
to an employee
from a recognized
provident
fund is fully
exempt

Monthy Pension is fully exempt 25% lump sum exempt on de

disability, retirement. Withd
in excess of 25% or before
One time lump sum
retirement are taxable. Mon
Commutation is also fully
annuity payment is also taxa
exempt from approved
last 3 yrs avg tax rate
pension scheme

as deductible
upto
sic)

in taxable
ax credit
n

DC)

redit allowed
ct to certain
ctions

xability
mployees

um exempt on death,
etirement. Withdrawal
f 25% or before
are taxable. Monthly
yment is also taxable at
vg tax rate