Hi, i frequently visit this forum, i am looking for a format for Bonus policy, i work as an HR in IT firm and have to format a bonus policy, can anyone help with by sending a policy so that i can have an idea.
From India, Delhi
From India, Delhi
most cos pay at the minimum stipulated @8.33
much depends on incentives/ scope for OT etc in your company.
for instance at one of my client sites, electricians/ tailors etc are happy with the overtime money on monthly level.
a better idea would be to check the policies of industry leaders in your line of business.
surya
From India, Delhi
41much depends on incentives/ scope for OT etc in your company.
for instance at one of my client sites, electricians/ tailors etc are happy with the overtime money on monthly level.
a better idea would be to check the policies of industry leaders in your line of business.
surya
From India, Delhi
Dear Friend,
1. Short title, extent and application - (1) This Act may be called the Payment of Bonus Act,1965
(2) It extends to the whole of India [Note: The words "except the State of Jammu and Kashmir" omitted by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September,1971).
(3) Save as otherwise provided in this Act, it shall apply to -
(a) Every factory; and
(b) Every other establishment in which twenty or more persons are employed on any day during an accounting year :
[(Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided that the appropriate Government may, after giving not less than two months' notice of its intention so to do, by notification in the official Gazette, apply the provisions of this Act with effect from such accounting year as may be specified in the notification, to any establishment or class establishments [including an establishment being a factory within the meaning of sub-clause (ii) of Cl. (m) of Sec.2 of the Factories Act, 1948 (63 of 1948)] employing such number of persons less than twenty as may be specified in the notification ; so however, that number of persons so specified shall in no case be less than ten.]
(4) Save as otherwise provided in this Act, the provisions of this Act shall in relation to a factory or other establishment to which this Act applies, have effect in respect of the accounting year commencing on any day in the year 1964 and in respect of every subsequent accounting year :
[(Note: Added by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September, 1971) Provided that in relation to the State of Jammu and Kashmir, the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year shall be construed as reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year :]
[(Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided further that when the provisions of this Act have been made applicable to any establishment or class of establishments by the issue of a notification under the proviso to sub-section (3), the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year or, as the case may be, the reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year shall in relation to such establishment or class of establishments, be construed as a reference to the accounting year specified in such notification and every subsequent accounting year.]
(5) An establishment to which this Act applies [Note: The words, brackets, letter and figure "under Cl. (b) of sub-section (3)" omitted by Act 23 of 1976, Sec.8 (w.e.f. 25th September, 1975)] shall continue to be governed by this Act notwithstanding that the number of persons employed therein falls below twenty [(Note: Ins. by Act 23 of 1976, Sec-3, (w.e.f. 25th September, 1975) or, as the case may be, the number specified in the notification issued under the proviso to sub-section (3)].
NOTES
Section 1 and 2 of Payment of Bonus (Amendment) Act No.43 of 1977 provides as under :
1. Shot title and commencement - (1) This Act may be called the Payment of Bonus (Amendment) Act, 1977.
(2) It shall come into force on the third day of September, 1977.
2. Act 21 of 1965 to have modified effect for a particular period - The Payment of Bonus Act, 1965 (hereinafter referred to as the principal Act) shall, -
(a) In relation to a factory or other establishment to which the principal Act applies immediately before the commencement of this Act and
(b) In relation to a banking company and the Industrial Reconstruction Corporation of India to which the principal Act applies on and from such commencement by virtue of this Act,
Have effect in respect of the accounting year commencing on any day in the year 1976 [and in respect of the accounting year commencing on any day in the year 1977], as if the amendments specified in Sections 3 to 19 has been made in that Act.
Explanation - In this section, the expressions "banking company" and "accounting year" shall have the meanings respectively assigned to them in clauses (8) and (1) of Section 2 of the principal Act".
Definitions - In this Act, unless the context otherwise requires, -
(1) "Accounting year" means -
(i) In relation to a corporation, the year ending on the day on which the books and accounts of the corporation are to be closed and balanced :
(ii) In relation to a company, the period in respect of which any profit and loss account of the company laid before it in annual general meeting is made up, whether that period is a year or not;
(iii) In any other case -
(a) The year commencing on the 1st day of April ; or
(b) If the accounts of an establishment maintained by the employer thereof are closed and balanced on any day other than the 31st day of March, then, at the option of the employer, the year ending on the day on which its accounts are so closed and balanced :
Provided that an option once exercised by the employer under para. (b) of this sub-clause shall not again be exercised except with the previous permission in writing of the prescribed authority and upon such conditions as that authority may think fit :
(2) "Agricultural income" shall have the same meaning as in the Income-tax Act ;
(3) "Agricultural income-tax law" means any law for the time being in force relating to the levy of tax on agricultural income ;
(4) "Allocable surplus" means -
(a) In relation to an employer, being a company [(Note: Ins. by Act 66 of 1980 (w.e.f. 21st August,1980) (other than a banking company)] which has not made the arrangements prescribed under the Income-tax Act for the declaration and payment within Indian of the dividends payable out of its profits in accordance with the provisions of Sec.194 of that Act, sixty-seven per cent of the available surplus in an accounting year ;
(5) In any other case, sixty per cent of such available surplus ; (Note: Certain words omitted by Act 23 of 1976, Sec.4 (w.e.f. 25th September, 1975)
(6) "Available surplus" means the available surplus computed under Sec.5 ;
(7) "Award" means an interim or a final determination of any industrial dispute or of any question relating thereto ny any Labour Court. Industrial Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947 (14 of 1947), or by any other authority constituted under any corresponding law relating to investigation and settlement of industrial disputes in force in a State and includes an arbitration award made under Sec. 10-A of that Act or under that law;
(8) "Banking company" means a banking company as defined in Sec.5 of the Banking Companies Act, 1949 (10 of 1949), and includes the State Bank of India, any subsidiary bank as defined in the State Bank of India (Subsidiary Bank) Act, 1959 (38 of 1959), [(Note: Ins. by Act 23 of 1976 Sec.4 (w.e.f. 25th September, 1975) any corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, (5 of 1970), [Note: Ins. by Act 66 of 1980, (w.e.f. 21st August, 1980) any corresponding new bank constituted under Sec.3 of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980] any co-operative bank as defined in Cl. (bii) of Sec.2 of the Reserve Bank of India Act, 1934 (2 of 1934),] and any other banking institution which may be notified in this behalf by the Central Government.
(9) "Company" means any company as defined in Sec.3 of the Companies Act, 1956 (1 of 1956), and includes a foreign company within the meaning of Sec.591 of that Act;
(10) "Co-operative society" means a society registered or deemed to be registered under the Co-operative Societies Act, 1912 (2 of 1912), or any other law for the time being in force in any State relating to co-operative societies ;
(11) "Corporation" means any body corporate established by or under any Central, Provincial or State Act but does not include a company or a co-operative society :
(12) "Direct tax" means -
(a) Any tax chargeable under -
(i) The Income-tax Act;
(ii) The Super Profits Tax Act, 1963 (14 of 1963);
(iii) The Companies (Profits) Surtax Act, 1964 (7 of 1964);
(iv) The agricultural income-tax law; and
(b) Any other tax which, having regard to its nature or incidence, may be declared by the Central Government, by notification in the official Gazette to be a direct tax for the purposes of this Act;
(13) "Employee" means any person (other than an apprentice) employed on a salary or wage not exceeding [(Note: Subs. by Act No.67 of 1985, Sec.2, for the words "one thousand and six hundred rupees" (w.e.f. 7th November, (1985)) two thousand and five hundred rupees] per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied;
(14) "Employer" includes -
(i) In relation to an establishment which is factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under Cl. (f) of sub-section (1) of Sec.7 of the Factories Act, 1948, the person named; and
(ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent ;
(15) "Establishment in private section" means any establishment other than an establishment in public sector;
(16) "Establishment in public sector" means an establishment owned, controlled or managed by-
(a) A Government company as defined in Sec. 617 of the Companies Act, 1956 (1 of 1956) ;
(b) A corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by -
(i) The Government; or
(ii) The Reserve Bank of India; or
(iii) A corporation owned by the Government or the Reserve Bank of India ;
(17) "Factory" shall have the same meaning as in Cl. (m) of Sec.2 of the Factories Act, 1948 (63 of 1948) ;
(18) "Gross profits" means the gross profits calculated under Sec.4 ;
(19) "Income-tax Act" means the Income-tax Act, 1961 (43 of 1961) ;
(20) "Prescribed" means prescribed by rules made under this Act ;
(21) "Salary or wage" means all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living, but does not include -
(i) Any other allowance which the employee is for the time being entitled to ;
(ii) The value of any house accommodation or of such of light, water, medical attendance or other amenity or of any service of any confessional supply of food grains or other articles;
(iii) Any traveling concession ;
(iv) Any bonus (including incentive, production and attendance bonus) ;
(v) Any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employees under any law for the time being in force ;
(vi) Any retrenchment compensation or any gratuity or other retirement benefit payable to the employees or any ex gratia payment made to him ;
(vii) Any commission payable to the employee.
(viii) Any commission payable to the employee.
Explanation - Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to form part of the salary or wage of such employees.
(22) Words and expressions used but not defined in this Act and defined in the Industrial Disputes Act, 1947 (14 of 1947), shall have the meanings respectively assigned to them in that Act.
3. Establishments to include departments, undertakings and branches - Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act :
Provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or breach shall be treated as separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus.
NOTES
When there is integral link and unity of management between the two division of a company it cannot be said as a separate undertaking although it is 60 miles away from one division. Gawlior Rayon Silk Mfg. Co. v. Industrial Tribunal 1975 Lab. I.C. 820.
5. Computation of available surplus - The available surplus in respect of any accounting year shall be the gross profits for that year after deducting therefrom the sums referred to in Sec.6.
[(Note: Added by Act 8 of 1969, Sec.2) Provided that the available surplus in respect of the accounting year commencing on any day in the year 1968 and in respect of every subsequent accounting year shall be the aggregate of -
(a) The gross profits for that accounting year after deducting therefrom the sums referred to in Section 6 ; and
(b) An amount equal to the difference between -
(i) The direct tax, calculated in accordance with the provisions of Section 7, in respect of an amount equal to the gross profits of the employer for the immediately preceding accounting year; and
(ii) The direct tax, calculated in accordance with the provisions of Section 7, in respect of an amount equal to the gross profits of the employer for such preceding accounting year after deducting therefrom the amount of bonus which the employer has paid or is liable to pay to his employees in accordance with the provisions of this Act for that year.]
NOTES
The burden of proving that the depreciation claimed is the correct amount admissible under Section 32 (1) of Income-tax Act lies on the party claiming such amount. Workmen of National and Grindlays Bank Ltd. v. National and Grindlays Bank Ltd., AIR 1976 S.C. 611.
Eligibility for bonus - Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.
Disqualification for bonus - Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for-
(a) Fraud; or
(b) Riotous or violent behaviour while on the premises of the establishment; or
(c) Theft, misappropriation or sabotage of any property of the establishment.
4. Computation of gross profits. - The gross profits derived by an employer from an establishment in respect of any accounting year shall -
(a) In the case of a banking company, be calculated in the manner specified in the First Schedule ;
(b) In any other case, be calculated in the manner specified in the Second Schedule.
Payment of minimum bonus - Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year :
Provided that there an employee has not employed fifteen years of age at the beginning of the accounting year, the provision of this section shall have effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted.
Payment of maximum bonus -
(1) Where in respect of any accounting year referred to in Sec.10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage.
(2) In computing the allocable surplus under this section, the amount set on or the amount set-off under the provisions of Sec.15 shall be taken into account in accordance with the provisions of that section.
From India, Madras
1. Short title, extent and application - (1) This Act may be called the Payment of Bonus Act,1965
(2) It extends to the whole of India [Note: The words "except the State of Jammu and Kashmir" omitted by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September,1971).
(3) Save as otherwise provided in this Act, it shall apply to -
(a) Every factory; and
(b) Every other establishment in which twenty or more persons are employed on any day during an accounting year :
[(Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided that the appropriate Government may, after giving not less than two months' notice of its intention so to do, by notification in the official Gazette, apply the provisions of this Act with effect from such accounting year as may be specified in the notification, to any establishment or class establishments [including an establishment being a factory within the meaning of sub-clause (ii) of Cl. (m) of Sec.2 of the Factories Act, 1948 (63 of 1948)] employing such number of persons less than twenty as may be specified in the notification ; so however, that number of persons so specified shall in no case be less than ten.]
(4) Save as otherwise provided in this Act, the provisions of this Act shall in relation to a factory or other establishment to which this Act applies, have effect in respect of the accounting year commencing on any day in the year 1964 and in respect of every subsequent accounting year :
[(Note: Added by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September, 1971) Provided that in relation to the State of Jammu and Kashmir, the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year shall be construed as reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year :]
[(Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided further that when the provisions of this Act have been made applicable to any establishment or class of establishments by the issue of a notification under the proviso to sub-section (3), the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year or, as the case may be, the reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year shall in relation to such establishment or class of establishments, be construed as a reference to the accounting year specified in such notification and every subsequent accounting year.]
(5) An establishment to which this Act applies [Note: The words, brackets, letter and figure "under Cl. (b) of sub-section (3)" omitted by Act 23 of 1976, Sec.8 (w.e.f. 25th September, 1975)] shall continue to be governed by this Act notwithstanding that the number of persons employed therein falls below twenty [(Note: Ins. by Act 23 of 1976, Sec-3, (w.e.f. 25th September, 1975) or, as the case may be, the number specified in the notification issued under the proviso to sub-section (3)].
NOTES
Section 1 and 2 of Payment of Bonus (Amendment) Act No.43 of 1977 provides as under :
1. Shot title and commencement - (1) This Act may be called the Payment of Bonus (Amendment) Act, 1977.
(2) It shall come into force on the third day of September, 1977.
2. Act 21 of 1965 to have modified effect for a particular period - The Payment of Bonus Act, 1965 (hereinafter referred to as the principal Act) shall, -
(a) In relation to a factory or other establishment to which the principal Act applies immediately before the commencement of this Act and
(b) In relation to a banking company and the Industrial Reconstruction Corporation of India to which the principal Act applies on and from such commencement by virtue of this Act,
Have effect in respect of the accounting year commencing on any day in the year 1976 [and in respect of the accounting year commencing on any day in the year 1977], as if the amendments specified in Sections 3 to 19 has been made in that Act.
Explanation - In this section, the expressions "banking company" and "accounting year" shall have the meanings respectively assigned to them in clauses (8) and (1) of Section 2 of the principal Act".
Definitions - In this Act, unless the context otherwise requires, -
(1) "Accounting year" means -
(i) In relation to a corporation, the year ending on the day on which the books and accounts of the corporation are to be closed and balanced :
(ii) In relation to a company, the period in respect of which any profit and loss account of the company laid before it in annual general meeting is made up, whether that period is a year or not;
(iii) In any other case -
(a) The year commencing on the 1st day of April ; or
(b) If the accounts of an establishment maintained by the employer thereof are closed and balanced on any day other than the 31st day of March, then, at the option of the employer, the year ending on the day on which its accounts are so closed and balanced :
Provided that an option once exercised by the employer under para. (b) of this sub-clause shall not again be exercised except with the previous permission in writing of the prescribed authority and upon such conditions as that authority may think fit :
(2) "Agricultural income" shall have the same meaning as in the Income-tax Act ;
(3) "Agricultural income-tax law" means any law for the time being in force relating to the levy of tax on agricultural income ;
(4) "Allocable surplus" means -
(a) In relation to an employer, being a company [(Note: Ins. by Act 66 of 1980 (w.e.f. 21st August,1980) (other than a banking company)] which has not made the arrangements prescribed under the Income-tax Act for the declaration and payment within Indian of the dividends payable out of its profits in accordance with the provisions of Sec.194 of that Act, sixty-seven per cent of the available surplus in an accounting year ;
(5) In any other case, sixty per cent of such available surplus ; (Note: Certain words omitted by Act 23 of 1976, Sec.4 (w.e.f. 25th September, 1975)
(6) "Available surplus" means the available surplus computed under Sec.5 ;
(7) "Award" means an interim or a final determination of any industrial dispute or of any question relating thereto ny any Labour Court. Industrial Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947 (14 of 1947), or by any other authority constituted under any corresponding law relating to investigation and settlement of industrial disputes in force in a State and includes an arbitration award made under Sec. 10-A of that Act or under that law;
(8) "Banking company" means a banking company as defined in Sec.5 of the Banking Companies Act, 1949 (10 of 1949), and includes the State Bank of India, any subsidiary bank as defined in the State Bank of India (Subsidiary Bank) Act, 1959 (38 of 1959), [(Note: Ins. by Act 23 of 1976 Sec.4 (w.e.f. 25th September, 1975) any corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, (5 of 1970), [Note: Ins. by Act 66 of 1980, (w.e.f. 21st August, 1980) any corresponding new bank constituted under Sec.3 of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980] any co-operative bank as defined in Cl. (bii) of Sec.2 of the Reserve Bank of India Act, 1934 (2 of 1934),] and any other banking institution which may be notified in this behalf by the Central Government.
(9) "Company" means any company as defined in Sec.3 of the Companies Act, 1956 (1 of 1956), and includes a foreign company within the meaning of Sec.591 of that Act;
(10) "Co-operative society" means a society registered or deemed to be registered under the Co-operative Societies Act, 1912 (2 of 1912), or any other law for the time being in force in any State relating to co-operative societies ;
(11) "Corporation" means any body corporate established by or under any Central, Provincial or State Act but does not include a company or a co-operative society :
(12) "Direct tax" means -
(a) Any tax chargeable under -
(i) The Income-tax Act;
(ii) The Super Profits Tax Act, 1963 (14 of 1963);
(iii) The Companies (Profits) Surtax Act, 1964 (7 of 1964);
(iv) The agricultural income-tax law; and
(b) Any other tax which, having regard to its nature or incidence, may be declared by the Central Government, by notification in the official Gazette to be a direct tax for the purposes of this Act;
(13) "Employee" means any person (other than an apprentice) employed on a salary or wage not exceeding [(Note: Subs. by Act No.67 of 1985, Sec.2, for the words "one thousand and six hundred rupees" (w.e.f. 7th November, (1985)) two thousand and five hundred rupees] per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied;
(14) "Employer" includes -
(i) In relation to an establishment which is factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under Cl. (f) of sub-section (1) of Sec.7 of the Factories Act, 1948, the person named; and
(ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent ;
(15) "Establishment in private section" means any establishment other than an establishment in public sector;
(16) "Establishment in public sector" means an establishment owned, controlled or managed by-
(a) A Government company as defined in Sec. 617 of the Companies Act, 1956 (1 of 1956) ;
(b) A corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by -
(i) The Government; or
(ii) The Reserve Bank of India; or
(iii) A corporation owned by the Government or the Reserve Bank of India ;
(17) "Factory" shall have the same meaning as in Cl. (m) of Sec.2 of the Factories Act, 1948 (63 of 1948) ;
(18) "Gross profits" means the gross profits calculated under Sec.4 ;
(19) "Income-tax Act" means the Income-tax Act, 1961 (43 of 1961) ;
(20) "Prescribed" means prescribed by rules made under this Act ;
(21) "Salary or wage" means all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living, but does not include -
(i) Any other allowance which the employee is for the time being entitled to ;
(ii) The value of any house accommodation or of such of light, water, medical attendance or other amenity or of any service of any confessional supply of food grains or other articles;
(iii) Any traveling concession ;
(iv) Any bonus (including incentive, production and attendance bonus) ;
(v) Any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employees under any law for the time being in force ;
(vi) Any retrenchment compensation or any gratuity or other retirement benefit payable to the employees or any ex gratia payment made to him ;
(vii) Any commission payable to the employee.
(viii) Any commission payable to the employee.
Explanation - Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to form part of the salary or wage of such employees.
(22) Words and expressions used but not defined in this Act and defined in the Industrial Disputes Act, 1947 (14 of 1947), shall have the meanings respectively assigned to them in that Act.
3. Establishments to include departments, undertakings and branches - Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act :
Provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or breach shall be treated as separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus.
NOTES
When there is integral link and unity of management between the two division of a company it cannot be said as a separate undertaking although it is 60 miles away from one division. Gawlior Rayon Silk Mfg. Co. v. Industrial Tribunal 1975 Lab. I.C. 820.
5. Computation of available surplus - The available surplus in respect of any accounting year shall be the gross profits for that year after deducting therefrom the sums referred to in Sec.6.
[(Note: Added by Act 8 of 1969, Sec.2) Provided that the available surplus in respect of the accounting year commencing on any day in the year 1968 and in respect of every subsequent accounting year shall be the aggregate of -
(a) The gross profits for that accounting year after deducting therefrom the sums referred to in Section 6 ; and
(b) An amount equal to the difference between -
(i) The direct tax, calculated in accordance with the provisions of Section 7, in respect of an amount equal to the gross profits of the employer for the immediately preceding accounting year; and
(ii) The direct tax, calculated in accordance with the provisions of Section 7, in respect of an amount equal to the gross profits of the employer for such preceding accounting year after deducting therefrom the amount of bonus which the employer has paid or is liable to pay to his employees in accordance with the provisions of this Act for that year.]
NOTES
The burden of proving that the depreciation claimed is the correct amount admissible under Section 32 (1) of Income-tax Act lies on the party claiming such amount. Workmen of National and Grindlays Bank Ltd. v. National and Grindlays Bank Ltd., AIR 1976 S.C. 611.
Eligibility for bonus - Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.
Disqualification for bonus - Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for-
(a) Fraud; or
(b) Riotous or violent behaviour while on the premises of the establishment; or
(c) Theft, misappropriation or sabotage of any property of the establishment.
4. Computation of gross profits. - The gross profits derived by an employer from an establishment in respect of any accounting year shall -
(a) In the case of a banking company, be calculated in the manner specified in the First Schedule ;
(b) In any other case, be calculated in the manner specified in the Second Schedule.
Payment of minimum bonus - Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year :
Provided that there an employee has not employed fifteen years of age at the beginning of the accounting year, the provision of this section shall have effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted.
Payment of maximum bonus -
(1) Where in respect of any accounting year referred to in Sec.10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage.
(2) In computing the allocable surplus under this section, the amount set on or the amount set-off under the provisions of Sec.15 shall be taken into account in accordance with the provisions of that section.
From India, Madras
It is still contradictary. Can somebody provide a clear picture whether the two components Basic + DA is to be consider to set he eligiblity critera. Because as per the above definition of Salary or Wages it is given that all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living are considered. What about other allowances such as Conveyance Allowance, Special Allowance, professional allowance etc etc.
Ravi
From India, New Delhi
Ravi
From India, New Delhi
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Amendment to Payment of Bonus Act 2015.jpg
Bonus act amendment gazette copy.pdf
Bonus-amendment _206.doc