Rule 324: Employer has no interest in gratuity fund money
Rule 324 protects gratuity fund money. Rules 316 to 329 govern approved gratuity funds under Part B of Schedule XI to the Act. No fund money is receivable by the employer under any circumstances, and the employer may not have any lien or charge on the fund.
Official notified Income-tax Rules, 2026Need advice on Rule 324?
This article is for general information. Read the official Rules and applicable Act amendments, including the Taxation and Other Laws (Amendment) Act, 2026. If you need professional advice for your situation, contact Bizeneed.
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Bare law
Rule 324 - Employer not to have interest in fund moneys
No money belonging to the fund shall be receivable by the employer under any circumstances nor shall the employer have any lien or charge on the fund.
Rule breakdown
Protection
No money receivable by employer.
No lien or charge for employer.
Key takeaways
No refund
Employer cannot get money back.
No lien
No security over the fund.
Absolute
Under any circumstances.
Practical checklist
- Keep fund assets ring-fenced.
Avoid
- Do not route fund money to the employer.
FAQs
Can surplus go back to the employer?
Rule 324 says no money of the fund is receivable by the employer under any circumstances.
Can the employer pledge fund assets?
No, the employer cannot have any lien or charge on the fund.
Superannuation equivalent?
Rule 309(2).
Glossary
- Lien
- Right to retain property as security.
- Fund
- Gratuity fund (Rule 316(c)).