Hi, Any one can please help. If bonus is paid monthly then PT will calculated including bonus or not?
From India, Visakhapatnam
1From India, Visakhapatnam
Mattamamta,
The answer is yes because the bonus amount will be considered as salary payment.
As per payment of Bonus Act, the bonus amount is payable to employees within 8 months from the date of closure of financial year and also depending upon profitability. Maximum Bonus amount payable on Bonusable salary is 20%.
By paying Bonus amount thru monthly salary you are incurring additional expenses of 4.75% towards employer's contributions to ESIC. You are also penalising your employees to make extra contribution of 1.75% on Bonus amount (which is not payable, if paid annually as per act)
Suresh
From India, Thane
The answer is yes because the bonus amount will be considered as salary payment.
As per payment of Bonus Act, the bonus amount is payable to employees within 8 months from the date of closure of financial year and also depending upon profitability. Maximum Bonus amount payable on Bonusable salary is 20%.
By paying Bonus amount thru monthly salary you are incurring additional expenses of 4.75% towards employer's contributions to ESIC. You are also penalising your employees to make extra contribution of 1.75% on Bonus amount (which is not payable, if paid annually as per act)
Suresh
From India, Thane
The bonus is paid annually for a financial year. That anything is paid monthly in wages & salary as bonus would not considered as "Payment of Bonus" as per the payment of Bonus Act. The payment of bonus is done from the month of April to November for preceding financial year.
From India, Mumbai
From India, Mumbai
What is your exact problem Bonus or Prof. Tax? You are competent enough to overrule Payment of Bonus Act then why you so much worried for Prof. Tax deduction?
If company pays Incentives, Production Bonus etc. quarterly, then it will not attract any ESI payment. You are the better Judge to decide because this issue was not discussed at Cite HR Forum for paying Bonus thru monthly salary.
However, any payment/earnings you show in payroll/salary, PT is applicable.
Suresh
From India, Thane
If company pays Incentives, Production Bonus etc. quarterly, then it will not attract any ESI payment. You are the better Judge to decide because this issue was not discussed at Cite HR Forum for paying Bonus thru monthly salary.
However, any payment/earnings you show in payroll/salary, PT is applicable.
Suresh
From India, Thane
Dear all,
The views of various contributors on the subject are contrary to the provision contained in section 17 of Payment of Bonus Act, 1965.
Please note that Bonus can also be paid periodically / monthly basis which is called "interim Bonus" and can be deducted / adjusted against the amount which becomes payable as Bonus after closing of the financial year.
However, I am not aware about the provisions of the Professional Tax where such amount paid as interim bonus on monthly basis is treated as wage or not.
From India, Delhi
The views of various contributors on the subject are contrary to the provision contained in section 17 of Payment of Bonus Act, 1965.
Please note that Bonus can also be paid periodically / monthly basis which is called "interim Bonus" and can be deducted / adjusted against the amount which becomes payable as Bonus after closing of the financial year.
However, I am not aware about the provisions of the Professional Tax where such amount paid as interim bonus on monthly basis is treated as wage or not.
From India, Delhi
Section 2(h) of Maharashtra State Tax on Professions, Trades, Callings and Employments Act:
"salary" or "wage" includes pay or wages, dearness allowance and all other remunerations received by any person on regular basis, whether payable in cash or kind, and also includes perquisites and profits in lieu of salary, as defined in section 17 of the Income-tax Act, 1961, but does not include bonus in any form, and on any account or gratuity
Section 17 in The Payment of Bonus Act, 1965
17. Adjustment of customary or interim bonus against bonus payable under the Act.—Where in any accounting year—
(a) an employer has paid any puja bonus or other customary bonus to an employee; or
(b) an employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payable, then, the employer shall be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him to the employee under this Act in respect of that accounting year and the employee shall be entitled to receive only the balance.
Reading the concerned sections, a clear picture emerges.
Whenever a doubt arise,it is the best practise to go back to the original act and most doubts get cleared.
From India, Pune
"salary" or "wage" includes pay or wages, dearness allowance and all other remunerations received by any person on regular basis, whether payable in cash or kind, and also includes perquisites and profits in lieu of salary, as defined in section 17 of the Income-tax Act, 1961, but does not include bonus in any form, and on any account or gratuity
Section 17 in The Payment of Bonus Act, 1965
17. Adjustment of customary or interim bonus against bonus payable under the Act.—Where in any accounting year—
(a) an employer has paid any puja bonus or other customary bonus to an employee; or
(b) an employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payable, then, the employer shall be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him to the employee under this Act in respect of that accounting year and the employee shall be entitled to receive only the balance.
Reading the concerned sections, a clear picture emerges.
Whenever a doubt arise,it is the best practise to go back to the original act and most doubts get cleared.
From India, Pune
Hi
From your message I observe that you are stationed at Visakhapatnam.
The professional tax is a State Act.
Both the Andhra Pradesh and Telangana P Tax Act defined the definition wages/salary as follows:-
Section 2 (m) "salary or wages" includes pay, or wages, dearness allowances and all other remuneration received by any assessee on regular basis, whether payable in cash or kind and also includes requisitions and profits in lieu of salary as defined in section 17 of the Income-tax Act, 1961, but does not include bonus in any form and on any account or gratuity;
As per the above definition salary or wages does not include bonus in any form and on any account.
Hence if your Establishment is situated in the State of Andhra Praddesh or Telangana you need not take into account the bonus paid on monthly basis for calculation of P Tax
Regards
P S Lakshmanan
S.G. Management Services
Kolkata
From India, Kolkata
From your message I observe that you are stationed at Visakhapatnam.
The professional tax is a State Act.
Both the Andhra Pradesh and Telangana P Tax Act defined the definition wages/salary as follows:-
Section 2 (m) "salary or wages" includes pay, or wages, dearness allowances and all other remuneration received by any assessee on regular basis, whether payable in cash or kind and also includes requisitions and profits in lieu of salary as defined in section 17 of the Income-tax Act, 1961, but does not include bonus in any form and on any account or gratuity;
As per the above definition salary or wages does not include bonus in any form and on any account.
Hence if your Establishment is situated in the State of Andhra Praddesh or Telangana you need not take into account the bonus paid on monthly basis for calculation of P Tax
Regards
P S Lakshmanan
S.G. Management Services
Kolkata
From India, Kolkata
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