Rule 326: Winding up or amalgamation of a gratuity fund
Rule 326 says that winding up a gratuity fund or amalgamating it with another fund requires prior approval of, and is subject to conditions imposed by, the approving authority. Rules 316 to 329 govern approved gratuity funds under Part B of Schedule XI to the Act.
Official notified Income-tax Rules, 2026Need advice on Rule 326?
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 326 - Arrangements for winding up of the fund
Any arrangements for the winding up of the fund or for its amalgamation with another fund shall be subject to the prior approval of, and to such conditions as may be imposed by, the approving authority.
Rule breakdown
Requirement
Prior approval for winding up or amalgamation.
Conditions may be imposed.
Key takeaways
Prior approval
Mandatory.
Amalgamation
Covered.
Superannuation parallel
Rule 312.
Practical checklist
- Apply for approval first.
Avoid
- Do not wind up without approval.
FAQs
Can a gratuity fund be merged freely?
No, prior approval is required (Rule 326).
Who approves?
The approving authority.
Superannuation rule?
Rule 312.
Glossary
- Winding up
- Closing the fund.
- Amalgamation
- Merging funds.