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Group Leave Encashment Plan

Group Leave Encashment Plan. ‘Accumulated leaves, encashed on termination of service’.

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Group Leave Encashment Plan

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  1. Group Leave Encashment Plan ‘Accumulated leaves, encashed on termination of service’

  2. Employees in the organization are entitled to certain leaves during the year. The leaves can either be availed during the year or can be carried forward. At the time of leaving the service employee can encash the accumulated leave on salary at that time if the company's rules permit. • As per the amended section 209 (3) of the Company's Act 1956 and Accounting Standard (AS-15) dated January, 1995, the employers have to account for the liability in respect of leave encashment facility, if any, available to the employees and to provide for the same in their Annual Accounts.

  3. Many employers are providing Leave Encashment benefit in addition to other retirement benefits to their employees which is a lumpsum amount payable to the employees or their dependants on retirement, death, disablement, voluntary retirement etc. • End-of-the-period leave encashment facility available to employees, can be a huge liability to the company • To meet this need of entrepreneurs and businesses, Insurers have introduced Group Leave Encashment Schemes. Just pay a yearly premium, fund your leave encashment liability.

  4. The amount depends upon the leave to the credit of the employee and his/ her salary at the time of exit. Liability is of increasing nature as it is linked with salary as well as leave position. • Risk premium paid for Life Insurance cover will be treated as business expenses. • At the time of retirement, employee gets tax relief as per section 10(10AA) of Income Tax Act.

  5. Insurers & Schemes • SBI Life - Group Leave Encashment cum Life Cover Scheme • Contributions paid continue to accumulate on traditional platform of investments • Participating Company is relieved of the investments responsibility • Funds are managed as per the IRDA guidelines • SBI Life will facilitate in completing all the necessary initial formalities • Free look period of 15 days • Life Cover can be revived within five years • No hidden costs, No Administration Costs • Benefits:On Retirement/ Resignation/ Termination OR On an unfortunate Death

  6. LIC - Group Leave Encashment Scheme (GLES) • ICICI PRUDENTIAL - Group Leave Encashment Plan • BAJAJ ALLIANZ LIFE – Group Leave Encashment Scheme

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