Nov 18, 2018

SBI will Block Net Banking by Nov 30 to Customers who Don't Do This

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The State Bank of India (SBI) has asked its customers to register their mobile number with the bank by the end of this month, failing which their internet banking access will be blocked. According to a banner on the bank’s corporate website, the customers need to register their mobile numbers with the lender by November 30 if they want to keep using internet banking. “Please register your mobile number by November 30.2018, failing which your internet banking access may be deactivated/blocked with effect from December 1, 2018,” SBI said on its website.

The order has been issued in line with the Reserve Bank of India (RBI) guidelines which make it compulsory for the commercial banks to ask their customers to mandatorily register for SMS alerts for electronic banking transactions.

A circular issued by the RBI in July 2017 stated that the banks may not offer facilities like electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers. The SBI website adds that the customers can enjoy the service in an “uninterrupted” manner, by registering their mobile number with the bank.

How to register mobile number with SBI?
If the customers are yet to register their number with the State Bank of India, they can either do it by visiting the branch or through an ATM. To register the number through an ATM, follow these steps –

1. The customers need to swipe their card and choose the ‘Registration’ option.

2. Enter the ATM PIN.

3. Select the mobile number registration option.

4. Enter the number and select ‘correct’ option after re-checking the number.

5. Re-enter the number and select the ‘correct’ option.

6. A message will appear on the screen that reads – “Thank you for registering your mobile number with us”.

7. The bank will contact the customers within three days and a reference number will send to their mobile phone via SMS.

8. Verify personal details and the number will be registered with the bank.

The bank had reminded its customers to register the number earlier this year with a tweet. “Registration of mobile number for all SBI accounts is mandatory in order to avail of internet banking facilities and electronic transactions, other than ATM Cash Withdrawals,” it had tweeted.

Nov 17, 2018

Proposed E-way Bill Generation Improvements

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Checking of duplicate generation of e-way bills based on same invoice number


The e-way bill system is enabled not to allow the consignor/supplier to generate the duplicate e-way bills based on his one document. Here, the system checks for duplicate based on the consignor GSTIN, document type and document number. That is, if the consignor has generated one e-way bill on the particular invoice, then he will not be allowed to generate one more e-way bill on the same invoice number. Even the transporter or consignee is not allowed to generate the e-way bill on the
same invoice number of that consignor, if already one has been generated by the consignor.

Similarly, if the transporter or consignee has generated one e-way bill on the consignor’s invoice, then any other party (consignor, transporter or consignee) tries to generate the e-way bill, the system will alert that there is already one e-way bill for that invoice, and further it allows him to continue, if he wants.


2. CKD/SKD/Lots for movement of Export/Import consignment

CKD/SKD/Lots supply type can be used for movement of the big consignment in batches. When One ‘Tax Invoice’ or ‘Bill of Entry’ is there, but the goods are moved in batches from supplier to recipient with the  ‘Delivery Challan’, then this option can be used. Here, the batch consignment will have ‘Delivery Challan’ along with copy of the ‘Tax Invoice’ or ‘Bill of Entry’ in movement. The last batch will have the ‘Delivery Challan’ along with original ‘Tax Invoice’ or ‘Bill of Entry’.

Some exports or imports will be in big consignment and may not be moved in one go from the supplier or to the recipient. Hence, CKD/SKD/Lots supply can be used for this.

For CKD/SKD/Lots of Export consignment, the ‘Bill To’ Party will be URP or GSTIN of SEZ Unit with state as ‘Other Country’ and shipping address and PIN code will be of the location (airport/shipping yard/border check post) from where the consignment is moving out from the country.

For CKD/SKD/Lots of Import consignment, the ‘Bill From’ Party will be URP or GSTIN of SEZ Unit with state as ‘Other Country’ and dispatching address and PIN code will be of the location (airport/shipping yard/border check post) from where the consignment is entered the country.

3. Shipping address in case of export supply type

For Export supply type, the ‘Bill To’ Party will be URP or GSTIN of SEZ Unit with state as ‘Other Country’ and shipping address and PIN code will be of the location (airport/shipping yard/border check post) from where the consignment is moving out from the country.

4. Dispatching address in case of import supply type

For Import supply, the ‘Bill From’ Party will be URP or GSTIN of SEZ Unit with state as ‘Other Country’ and dispatching address and PIN code will be of the location (airport/shipping yard/border check post) from where the consignment is entered the country.

5. ‘Bill To – Ship To’ transactions

There are four types of ‘Bill To – Ship To’ transactions. These types depend upon the number of parties involved in the billing and movement of the goods. The following paras explain the same.
o Regular: This is a regular or normal transaction, where Billing and goods movement are happening between two parties - consignor and consignee. That is, the Bill and goods movement from consignor to consignee takes place directly.

o Bill To – Ship To: In this type of transaction, three parties are involved. Billing takes places between consignor and consignee, but the goods move from consignor to the third party as per the request of the consignee.

o Bill From – Dispatch From: In this type of transaction also, three parties are involved. Billing takes places between consignor and consignee, but the goods are moved by the consignor from the third
party to the consignee.

o Combination of both: This is the combination of above two transactions and involves four parties. Billing takes places between consignor and consignee, but the goods are moved by the consignor
from the third party to the fourth party, as per the consignee’s request.


6. Changes in Bulk Generation Tool

New columns have been added in the Bulk Generation Tool. The same will be released on 16th November 2018.

Nov 16, 2018

RTGS new Feature Telling Time of Credit Funds in Beneficiary Account

4:29 PM 0
Presently, the National Electronic Funds Transfer (NEFT) system provides for sending a positive confirmation to the remitter of the funds regarding completion of the funds transfer, thus giving an assurance to the remitter that the funds have been successfully credited to the beneficiary account. It has now been decided that banks will provide the same facility to the remitter of funds under the RTGS system as well.

2. Initially, the positive confirmation feature in RTGS would be available for member banks wherein both remitter and beneficiary banks access RTGS through thick client interface / SFMS member interface. Member banks are expected to communicate the same to their customers. The positive confirmation feature would be subsequently enabled for member banks accessing RTGS through other channels as well.

3. In this connection, a new message format (camt.059) is being introduced to communicate an acknowledgement to the remitting bank containing the date and time of credit to beneficiary account. This message would flow from the beneficiary bank to the remitter bank through the SFMS. After receiving the positive confirmation from the beneficiary bank, the remitter bank shall initiate an SMS and / or generate an e-mail to the remitter. The detailed process flow for the positive confirmation process is appended.

4. All banks are required to put in place systems to ensure straight-through-processing (STP) based confirmation processing. The beneficiary bank shall ensure that such confirmation message is sent as soon as the amount is credited to the beneficiary account in CBS while the confirmation message from the remitting bank shall be necessarily sent on a real time basis and in any case not beyond one hour after receipt of credit message from the beneficiary bank.

5. The system of sending positive confirmation to the customers shall be operationalised by banks at the earliest but not later than two months from the date of this circular.

6. These directions are issued by Reserve Bank of India, in exercise of the powers conferred by section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

Yours faithfully

(P. Vasudevan)
Chief General Manager

Nov 15, 2018

Comparison on Flat Interest Rate and Reducing Interest Rate on Loan

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Flat Rates and Reducing Balance Rates are the two prevalent rate structures employed by lenders to fix the cost of borrowing. Personal loans usually attract interest in the range between 10.75% and 25% per annum. Rates can be higher of course, usually dependent on an individual’s credit standing. Applicants with a poor credit score and those without a credit history are usually offered a higher interest rate. Various other parameters including income, repayment behavior and employment stability also impact interest rates offered on personal loans.

Lenders use risk-based pricing to determine interest rates on loan applications. Under this model, an applicant’s credit behavior is evaluated, and the cost of borrowing is determined by calculating the approximate probability of a default. In accordance with the risk-based pricing model, individuals with poor credit health are understood to be more likely to default, thereby shooting up the rate offered on the loan application.


Understanding flat interest rates and reducing balance rates
Under the Flat Interest Rate regime, interest is calculated on the entire loan amount, against the tenure. Meaning, if you take a loan of Rs 1,00,000 for a tenure of 3 years against an interest rate of 12%, the interest payable under the flat rate structure is Rs 36,000.

In the case of reducing balance rates, the interest is computed on the outstanding principal, after taking into account repayments that are consistently made. As and when repayments are made, the interest is accordingly levied and computed on the remaining balance.

While lenders can use both type of rates to advertise their product, the interest rate on a loan under a reducing balance basis is usually higher than under the flat rate regime. Meaning, a Flat Interest Rate of 10% might amount to an interest of 15% or more under the reducing balance basis – this is dependent on the loan amount and the tenure in question.

Knowing the Real Interest Rate applicable to your loan
As a borrower, you might find instances where lenders are offering personal loans at rates as low as 8% p.a. This however, isn’t true, as the 8% rate is the Flat Rate, amounting to a rate of at least 15% in accordance with the reducing balance rate method. As such, advertising the flat rate on a personal loan isn’t logical, as the flat rate never reflects the real cost of borrowing. The reducing balance rate, also known as the Effective Rate of Interest, is what indicates the real interest rate on your loan and the amount you’ll be repaying at the end of your loan tenure.

As for whether you can choose a rate regime that will hold applicable to your loan, that isn’t possible, since lenders decide what type of rate calculation they use. That said, it is always advisable to know what rate method your loan entails. Knowing the EIR (Effective Interest Rate) applicable on your loan will reflect the real interest rate and the actual amount you’ll end up repaying once your tenure concludes.

Nov 14, 2018

Health Insurance will be Customer Favorable with Many New Changes

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In order to make the health insurance cover more customer-centric, a panel constituted by the Insurance Regulatory and Development Authority of India (IRDAI) has proposed several important changes to the existing health insurance exclusion rules. The revisions in the health cover are believed to make the coverage more comprehensive and efficient for the policyholders. The changes are proposed in the waiting period of the policy, inclusion of various diseases which were earlier excluded from the policy and inclusion of advanced medical treatments.

The IRDAI even highlighted the numbers which show that the health insurance covers have surged significantly in the past few years with the premiums growing from Rs 741 crore in 2001-02 to Rs 37,000 crore in 2017-18. As per the report, the health insurance industry is expected to continue to go up at a rate of 24-25% for the next 5-6 years and is projected to touch the 100,000-crore mark by the end of year 2022.

Cover for Severe Health Conditions
It was often noted that a certain group of patients including cancer survivors, epilepsy patients and many others with specific permanent physical disabilities are denied medical coverage due to their severe health conditions. However, the panel has now suggested insurers to offer proper health insurance to all such individuals, condition being some specific pre-existing diseases will not be covered in the policy. In total, 17 such conditions have qualified under this clause congenital and valvular heart disease, chronic liver and kidney diseases, epilepsy, among others.

Reduced Waiting Period
One of the major proposals submitted by the panel is a four-year waiting period for inclusion of any ailment in the health cover against the current waiting period which is for two years. However, the working group made it clear that for some conditions such as hypertension, diabetes and cardiac problems, the waiting period must be reduced to 30 days. Moreover, in order to ensure that the people suffering from pre-existing diseases, including those with disabilities, can get proper health insurance, the panel has suggested that the insurers can include permanent exclusions with due consent of the customer.

Mandatory Coverage for Diseases Developed Post Policy
As per the proposal, all health conditions and illnesses acquired after the issuance of policy, apart from those not covered under the policy contract (like infertility and maternity), must be covered under the policy. The panel suggested that there are numerous major ailments that cannot be permanently excluded. Some of the important and major diseases that must be added to the list include Alzheimer, Parkinson, AIDS/HIV and morbid obesity.

Insurer Cannot Deny Claim after 8 Years of Policy
Another great relief for the policyholders is that the insurers will not be allowed to question the claims of the policyholder on the grounds of non-disclosures. However, this will only be applicable after eight years of continuous renewals by the policyholder. The panel believes that this move will certainly ease policyholder’s concerns about rejection of claim even after years of paying set premiums. However, the policy would be entirely subject to all clauses including sub-limits, co-pay and deductibles as mentioned in the policy contract.

Inclusion of Advanced Medical Treatments
Under this proposal, a dedicated Health Technology Assessment committee will be formed that will allow the inclusion of advanced treatments and drugs available in the Indian market. As per the industry experts, the committee will act as a self-regulatory body and work according to assigned limits. With implementation of the procedure, the policyholders will be easily able to undergo advanced treatment under modern procedures without thinking about the financial aspect. Moreover, the insurance provider will not be able to exclude any of the important procedures already added in the list by the working committee. Claims related to oral chemotherapy and peritoneal dialysis will also be added to the list and the insurers will be directed to approve all related claims.

Nov 1, 2018

TDS Form No. 13 for No Deduction or Lower Deduction u/s 197 or 206C

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TDS Form No. 13 for No Deduction or Lower Deduction u/s 197 or 206C
In exercise of the powers conferred by sections 197 and 206C read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following
rules further to amend the Income-tax Rules, 1962, namely:—

1. Short title and commencement,__ (1) These rules may be called the Income–tax (Eleventh Amendment) Rules, 2018.

(2) They shall come into force from the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962,-
(I) for rule 28, the following rule shall be substituted, namely: __
“Application for grant of certificates for deduction of income-tax at any lower rates or no
deduction of income-tax.

28. (1) An application by a person for grant of a certificate for the deduction of income-tax at any lower rates or no deduction of income-tax, as the case may be, under sub-section (1) of section 197 shall be made in Form No. 13 electronically, ___

(i) under digital signature; or
(ii) through electronic verification code.

(2) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for ensuring secure capture and transmission of data and uploading of documents and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the furnishing of Form No.13.”;

(II) in rule 28AA, __
(A) in sub-rule (2), __
(a) in clause (ii), for the words “income, as the case may be, of the last three”, the words “or estimated income, as the case may be, of last four” shall be substituted;

(b) in clause (iv), after the word “payment”, the words “, tax deducted at source and tax collected at
source” shall be inserted; (c) clause (v) and clause (vi) shall be omitted;
(B) for sub-rule (4), sub-rule (5) and sub-rule (6), the following sub-rules shall, respectively, be substituted, namely:__

“(4) The certificate for deduction of tax at any lower rates or no deduction of tax, as the case may be, shall be issued direct to the person responsible for deducting the tax under advice to the person who made an application for issue of such certificate:

Provided that where the number of persons responsible for deducting the tax is likely to exceed one hundred and the details of such persons are not available at the time of making application with the person making such application, the certificate for deduction of tax at lower rate may be issued to the person who made an application for issue of such certificate, authorising him to receive income or sum after deduction of tax at lower rate.

(5) The certificates referred to in sub-rule (4) shall be valid only with regard to the person responsible for deducting the tax and named therein and certificate referred to in proviso to the sub-rule (4) shall be valid with regard to the person who made an application for issue of such certificate. 

(6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for issuance of certificates under subrule (4) and proviso thereto and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the issuance of said certificate.”;

(III) in rule 28AB, __
(A) in sub-rule (2), __
(a) in clause (i), the word “and” shall be inserted at the end;
(b) in clause (ii), the words “and” occurring at the end shall be omitted;
(c) clause (iii) shall be omitted.

(IV) for rule 37G, the following rule shall be substituted, namely: __
“Application for certificate for collection of tax at lower rates under sub-section (9) of section 206C
37G. (1) An application by the buyer or licensee or lessee for a certificate under sub-section (9) of section 206C shall be made in Form No. 13 electronically, -

(i) under digital signature; or
(ii) through electronic verification code.
(2) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for ensuring secure capture and transmission of data and uploading of documents and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the furnishing of Form No.13” ;

(V) in rule 37H, __
 (a) for sub-rule (1), the following sub-rules shall be substituted, namely:-
 “(1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 37G is satisfied that existing and estimated tax liability of a person justifies the collection of tax at lower rate, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (9) of section 206C for collection of tax at such lower rate;

(1A) The existing and estimated tax liability referred to in sub-rule (1) shall be determined by the Assessing Officer after taking into consideration the following, namely: __

(i) tax payable on estimated income of the previous year relevant to the assessment year;
(ii) tax payable on the assessed or returned or estimated income, as the case may be, of the last four
previous years;
(iii) existing liability under the Act and the Wealth-tax Act, 1957 (27 of 1957);
(iv) advance tax payment, tax deducted at source and tax collected at source for the relevant
assessment year relevant to the previous year till the date of making application under sub-rule (1)
of rule 37G.”;

(b) after sub-rule (5), the following sub-rule shall be inserted, namely : __
 “(6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax
(Systems), as the case may be, shall lay down procedures, formats and standards for issuance of certificate under sub-rule (5) and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the issuance of said certificate.”;

(VI) in Appendix II, for Form No.13, the following shall be substituted, namely:__ 
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Download Form no. 13 for TDS

Apr 11, 2018

Accounting Implication of New Gratuity Benefits for FY 2017-18

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The Payment of Gratuity (Amendment) Bill, 2018 has been passed by the Lok Sabha on 15th March, 2018 and by the Rajya Sabha on 22nd March, 2018. The Bill has been assented to by the Hon'ble President and, notified by the Government and has been brought in force from 29th March, 2018.

The amendment seeks to increase the maximum limit of gratuity from Rs. 10 Lakhs to Rs. 20 Lakhs. The objective is to make employees in the private sector as well as public undertakings and autonomous organisations under the government who are not covered under the Central Civil Services (Pension) rules, eligible to receive higher amount of gratuity.

The amendment will also provide higher tax benefit for those employees who are covered under The Payment of Gratuity Act, 1972 ("Gratuity Act") and who are entitled to receive enhanced gratuity benefits. Gratuity received by Government employees is completely exempt under the income-tax Act, whereas gratuity received by non-government employees is exempt subject to certain ceiling limits.

In this article we shall look into the background, the impact of the amendment and the accounting implications under Indian Accounting Standards notified under Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) and under Accounting Standards (AS) under the Companies (Accounting Standards) Rules, 2006.

Background
2. The Gratuity Act intends to provide social security to employees after retirement and is applicable to enterprises with ten or more employees. The Act provides for payment of gratuity on account of retirement/superannuation/resignation/any physical impairment during the employment. Further, as per the rules, an employee is required to complete five years of continuous service (subject to certain exceptions) in order to be eligible for the payment of gratuity. Gratuity is an important social security legislation to wage earning population in industries, factories and establishments.

Eligible employees, covered under the Gratuity Act are entitled to it and is calculated at the rate of 15 days salary (based on last drawn salary), for each number of completed years of service. Prior to the amendment coming into effect, the employees of Government enterprises were entitled to a maximum amount not exceeding Rs. 10 lakhs. Many private sector enterprises also follow this ceiling and limit the entitlements of their employees. Even though there is an upper limit, the Gratuity Act also provides that an employee has the right to receive a higher amount under any award or agreement or contract with the employer (better terms of employment).

An employee who has rendered 25 years of service with a monthly salary of Rs. 1 Lakh (at the time of retirement), is eligible to receive Rs. 14.42 Lakhs (15/26 x 1,00,000 x 25 years) as gratuity. This amount would have been otherwise restricted to Rs. 10 lakhs under the earlier provisions for government enterprises and private enterprises who followed the limit (unless agreed for a higher limit as better terms of employment).

Also, the tax exemption in the hands of the employees under Income Tax Act, would have been restricted to Rs. 10 Lakhs under the earlier provisions.

Amendment
3. The erstwhile upper ceiling limit on gratuity amount was Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar. Before implementation of 7th Central Pay Commission recommendations, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, with implementation of 7th Central Pay Commission recommendations, in case of Government servants, the ceiling limit has been raised to Rs. 20 Lakhs.

The amendment allows the government to increase the gratuity ceiling limit from time to time without amending to the law. Considering the inflation and wage increase even in case of employees engaged in private sector, the Government decided that the entitlement to gratuity should also be revised in respect of employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the Government has increased the maximum limit of gratuity to such amount as may be notified by the Central Government from time to time. The Government has issued the notification specifying the maximum limit of Gratuity to Rs. 20 Lakh.

In addition, the amendment has revised the provisions relating to calculation of continuous service for the purpose of gratuity in case of female employees who are on maternity leave from 'twelve weeks' to 'such period as may be notified by the Central Government from time to time'. This period has also been notified as twenty six weeks.

The amendment would increase the limit of gratuity benefits that employees would get and also increase the tax-exempt gratuity amount in the hands of the employees. This will immediately benefit mostly those who are in high salary bracket.

How will companies be impacted by an increase in gratuity limit?
4. Companies need to carefully examine the impact of the change, as well as the financial impact on the financial statements of FY 2017-2018.

The companies (those who followed the erstwhile limit of Rs. 10 Lakhs) will be affected by the increase. The impact of the amendment will be recognised in the financial statements for the current financial year; i.e., FY 2017-18. The amendment would cause an increase in the employee gratuity benefit obligations, classified as defined benefit plans. The increase in gratuity limit will affect the benefits already accrued, since the time of an employees' joining date.

Under both Ind AS 19 Employee Benefits and AS 15 Employee Benefits, past service cost is the change in the present value of the defined benefit obligation resulting from a planned amendment or curtailment. Therefore, the amended increased limit would qualify as a past service cost.

The increase in liability will be needed to be recognised through a corresponding charge to profit and loss account. The timing of the charge in profit and loss will be different for Ind AS 19 and AS 15.

Impact under Ind AS 19
5. Under Ind AS 19, whole of this increased liability is recognised immediately in the P&L statement under the head 'past service cost'. Therefore, companies reporting under Ind AS 19 will face the full force of this amendment immediately. Paragraph 103 of the standard states the following:

An entity shall recognise past service cost as an expense at the earlier of the following dates:

(a) when the plan amendment or curtailment occurs; and
(b) when the entity recognises related restructuring costs (see Ind AS 37) or termination benefits (see paragraph 165).

Impact under AS 15
6. The financial impact under AS is different. Under AS 15 past service costs are classified into vested and non-vested components. AS 15 states the following:

68. In determining the present value of its defined benefit obligations and the related current service cost and, where applicable, past service cost, an enterprise should attribute benefit to periods of service under the plan's benefit formula. However, if an employee's service in later years will lead to a materially higher level of benefit than in earlier years, an enterprise should attribute benefit on a straight-line basis from:

(a) the date when service by the employee first leads to benefits under the plan (whether or not the benefits are conditional on further service); until
(b) the date when further service by the employee will lead to no material amount of further benefits under the plan, other than from further salary increases.
Vested component is the past service cost in respect of those employees that have completed the minimum of 5 years of service as at 29 March 2018, and are entitled to receive gratuity immediately if they leave the company. Vested past service costs are required to be recognised immediately in the profit and loss account.

Non-vested component is the past service cost in respect of those employees who have less than 5 years of service. Deferral of the non-vested past service is permitted over the average remaining period until vesting. For example, if on an average certain class of employees have less than 5 years of completed service in the entity, have an average past service of 1 year. The non-vested past service cost arising on account of the amended ceiling can be deferred over the remaining 4 years until it is vested. This would mainly impact companies which have significant number of new employees.

Concluding remarks
7. Companies should carefully evaluate the impact of the amendment on the financial statements of FY 2017-18. Companies which used to limit their employees' gratuity payouts, including government companies, to Rs. 10 Lakh prior to the amendment may witness a significant financial impact arising on account of the amendment. The actuarial valuation exercise for FY 2018-19 and quarter ending 31 March 2018, for listed entities, should include an examination of the impact of the amendment. It is recommended that the impact of the past service cost arising on account of the amendment should be appropriately brought out in the financial statements by way of a disclosure.