Chandigarh act 021 of 1965 : The PAYMENT OF BONUS ACT, 1965

THE PAYMENT OF BONUS ACT, 1965

(21 of 1965)r

..1!1.n Att to proa.idr,for.th(_poymcrt of bonus to r,,rrr::rti;;i:;::to:r','rl,!ri)t'sloblis,htn'nts on t.ht,b.nsis of profits-or on lhc bnsis of production oi prbductivify and lor^tnn ttcrs conncctctl tht'rauith.l

Bl; it enacted by Parliament in the Sixteenth year of thc Republic of lndia as follows:-

l. Short title, cxtenl and application.--( I ) This Act nray be called the

I'ayment of Bonus Act, 1965.

(2) It extends to the whole of India 3[-**].

(3) Save as otherwise provided in this Act, it shall apply to_.

(a) every factory; and

(b) every other establishment in whlch twenty or more persons are _ employed on any day during an accounting year: {[Provided that the_ appropriate Covemment rnay, a]ter giving not less than two months' notice of its intention so to do, by notilication in the Official

Cazette, apply the provisiorrr ot lhrs ncl \r.ith eftmt lrorn sullr .ri:ounting year

as may be specified in tht, notrhr,.alkrn, to.lnv r,stll:'l jshmrnr or cla=si of

establishments..[including ,rn c'st.rbllilrrn.'rrl [rlng.r t;r(torv rvilhln the mcaning of sub-clause (ii) of clause (rn) of section ? of lhr,f.rr:krrir-,,c,\r'f. lqa$(63of l94gi emp_loying such number of persons less than twenty as may be specilied in the

notification; so, however, that the numb(r of persons so specified ;hall in no casc

be less than ten.l

(4) Save as otherwise provided in this Act, the provisiors of this Act shall, in_relation to a factory or other cstablishment to which this Act applies, havc effect in respect of the accounting year commencing on any day in the year 1964 and-in respect of every subsequent accounting ye;r;

'[Provided that in relation to the State of Jammu and Kashmir, the reference to.the accountht year commencint on any day in the year 1964 and every subsequent accountint year shall be construed as reference to the accountinl year commencing on any day in the year 1968 and every strbsequent accountin[ year:l

b[Providcd further that when the provisions of this Act have been made appticable to any establishment or cliss of establishments by the issue of a noiification under the proviso to sub-section (3), the reference to the accounting year commencing on any day in lhe year 1954 and every subsequent accountingl year rrl as the case may be, the reference to the accounting year-commcncing on

1. The Act haF lreen extcnded to Goa, Daman rnd Diu by Act 6 ol n-n, sec. 2 and Sch.

2 Subs by Act 23 ol 1976, s€c. 2, tor the tong fitle (w,r.e.f 25-g-1gZS) LonE tirle, before substitution, stood as urderl

"An^Act to plovide for the payment of bonus to personF employed in cert.rin establishmenls and for mattcrs cofflected therewifh,',

3. The !r'ords "cxcept the State of lomnru and Klshmit,, omitted by Act 51 of 1970, sec 2 ind Sch (w.c t l-9-1971).

4 Addcd by Act 23 of 1976, sec 3(.) (w,r€-t 25-9-1975).

5. Added by Act 51 of 1920, sec, 2 and Sch, (w.e.t. l.g.tg?t).

6 Ins by Act 23 ot 1976,6ec.3(b) (w,re.f. 2j-9-1975) .t

1

[Sec 1The Payment of Eonus Act, 1965 any day in the year 1968 and every subsequent accountinE year, shall, in relation to such establishrnenl or class of establishments, be construed as a reference to the accounting _vear specified in such notification and every subsequent accounting year.l

(5) An establishment to which this Act applies tl'*l shall continue to be govem€d by thrs Act notwithstanding that the number of persons emploled lherein falls below trventy 2[or, as the case may be, the number specified in the notilication issued under fhe proviso to sub-section (3)].

COMMENTS

A pnrt-iime employte is .lso an enrplolce for the purpose of calculating the number ()f crnployces.-2o or nore-under sectjo 1(3\(b, Autotuobilt Ktnmcha songh v lniust tt fIb nal . tt976) 38 Fl R :(,8 (All).

2. Definitions.-ln this Act, unless the context otherwise reqrrircs,-

(1) "accounting year" means-

(i) in relation 10 a corporation, the year ending on the ctay on which the books and accormts of the corporation are to be closed and balanced;

(ii) in relation to a company, the period in respect of which any prolit and loss account of the company laid before ii in armual 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 paragraph (b) of this sub-clause shall not again be exercised except lvith the previous pcrmission in writing of the prescribed authority and upon such conditions as that authority may think fit;

(2) "agricultural income" shall have the sam€ meaning as in the lncome-tax Act;

"agricultural incorne-tax law" means any law for the tim€ being in force relating to the levy of tax on agricultural income;

"allocable surplus" means-

(a) in relation to an €mployer, being a company 3[(other than a banking company)] which has not made the arrangements prescribed under the lncome-tax Act for the declaration and payment within India of the dividends payable out of its profits in accordance with the provisions of section 194 of that Act, The words "under clause (b) of sub-section (3) ' omitted by Act 23 of 1976, sec, 3(cxi) (w.r.eI 25-e-1975)

Added byⁿ cl²³ol 1976, sec. 3(cXii) l\tri e I. 25-9.1975),

Ins. by Act (6 of 1960, sec. 2(a) (w r.cJ. 2l{-1980). Ear)ier the woJds "(other than a bankrng cornpany)" werc omitted by Act 23 of 1976, sec. {(aXi) \wr.e.t.2r9-1975t

(3)

(4)

l.

2

srxty-seven per cent of the available surplus in an accounl.ing year; ,.,91 i" "ny other case, sixty per cent of such available surplus; 'r"l

(5) "appropriatb Government,, means_

(i) in relation to an establishhent in respect of which the Tho Paymenl ol Bonus Acl, ,965

appropriate Govemrnent under the

7947 (74 ol 7947), is the Cenrral

Govg11lmgnl'

Industrial I)isputes Act,

Goverrunent, the Central

(ii) in relation to. any other establishment, the Govemment of the )(are rn whrch that other establishment is sihtate;

(6) "availab_le surplus,, means the available surplus computed under.section 5;

(7) " award" means an dispute or of any H':lr"f#.il.8:Tl1:Industrial Tribuna constituted under the li::l]j|PfT,'les _act, 1s47 (.t4 of.1e47l, o, uy a"y otne, urir-r,o.,ty constituted rlnder any corresponding law relitin/ to _"".ii"ut onand settlemcnt ol industrial disputes in force in a State and inc]uoesf an arbitralion award made under section IOA ot

l d

t 10

f that Act or under that law; a banking company as defined in section Act, 1949 (10 ol 1949), and includes rhe sidiary bank as defined in the State Bank Act, 1959 (38 ot 1959), 2[any p::l,le 9oltt.,ie_s lncquisitio,irlendd il,ff".11'f ffi:,llf ,5 ;:;1970 (5 of 7920),3[any cbrresponding new bank const,ruted under section 3 of the

Undertakings) A

defined in clause

1934 (Z ot 1934),1 and any

norified in this behalf by'tt

.. , A -co-operarive bank is a banking :"?y"Yr:Yi,,. cfttrat co-op. Bn k Ltd. v. tnh$t,lttInbuhal, ll9a9) 58 Ft,R 924 (Mad)

(9) company" means any cornpany as defined is sectjon -3 of thc Companies Ac; 't956 (t ot tist), and includes a foreigrr company within the meaning of section 591 oI that AcU

(10) "co-operative society means a society registered or rJeenred to bc registercd under the Cloperative Soiteriei act, 1912 (2 ot.t9t2), orany other law for the tirae being in force in any Statc r€latrng to co_ operating societies;

1.

2

3

Iho.words "and _includcs a|y amoftrt tr€aled as such under liub{iection (2) ot srction 4,, omitted bv Act 23 oI 19?6, sec. {(axii) (\t Let 2'_g-1g75) lns. by Act 23 a( 1976, sec 4(b) (w..e.f 25_9_1975)

Ins. hv Act 66 of t980, cec Z(bj (w r e t. tt-8-t980)

3

me Payn cnt ol Bonus Act' l⁵

(S€c. 2

01)

{12) i l'})

(14)

thnn atr n:itabllshment in Publif, sPdor; *uior"il*r,rnr"ort in pubtic sret$r,' m*ilns an fglnbli$lwfnl (}l{,n{rii.

{.{.1

(b) an forly.per ccul^ol ih; caPitnl togcthcr) t'Y-

(i) the Governmcnl; or liii^tte Reserue Bank of India; or liiii " corporation

owned by the Govemment or the Reserve^l

(ii) h

rv b^{xr urqr rr} (iiii . t t"tio^{rn r:}

Bank of Indla;

i. s"o" w i.ie.r 2016, scc 2, for "tcn tirousa^d rup ewordsi ... ., ' r -.----.., .-.^-- -..L.rih,+-l hv a.r 45 of and fiveli implied;

"erirploycr" ineludes* ilil'iiitr:

ted ruPees^weft

hundrcd rup€es' substitutcd by Act 67 ot l9tD, eec 2, ror rne worqs '"' -'---"* --'- -^- r d

(w.r.e.f.7-11-1985)

4

The Pavment ol Bonus Act. t965 (17)^" faclory" shall have the same meaning as in clause (nr) o[ section 2 of the Factories Act, 1948 (63 oI 7948\;

(18) "gross profits" means the gross profits calculated under section 4;

(19) "Income-tax Act" means the Income-tax Act, 1961, (43 of 1961);

(20) "prescribed" means prescribed by rules made under this Act; (2-l) "salary or wage" mearu all remuneration (other than remuneration in respect of over-time work) capable of being expressed jn terms of money, which would, if the terms of cmployment, express o. implied, were fulfilled, be payable to an employee in respect of^his 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 hving), but does nol include-

(i) any other allowance which the employee is for the time being enfitled^to;

(ii) the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles; ( iii) any travellint concession;

(iv) any bonus (including incentive, production and attendance bonus);

(v) any contribution paid or Payable by the employer to any pension fr.rnd or provident fund or for the benefit of the employee under any law for the time being in force;

(vi) anv retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex Sratio Payment made to him;

(vii) any commission payable to the emPloyee. Explanntion.-lNhere^an employee is given in lieu of the whole or part of the salary or w^Ee paybble to him, free food allowance^or free food by his employer, such food allowance or rhe value of such food shall, fot the purpose of this clause, be deemed to fonn part of the salary or wage of such employee;

COMMENTS

(i) l-,ry-off comperEation ii included in dre term of "salary" or "wngcs"; Mohqn Xumnr^v Det'ul_v LALout CommissioncL (1991) 62 FLR 903 (Ker).

(ri) Deamess altrowance and city comPensatory allowance are lncltlded in the dciinitior oI

"sn[^ry" o. "wages" undcr section 2 (21) of the Act; S Krishnamwthy v Pt?sidinq Ofirtt, Iabo r Cou+, 0986\ 55 FLR 535.

(iii) Dearncss allolA'ance is d pnrt and parccl o( wages; S.inlia Naoigalion Co I'td v Stindia Employees Ution, (1963) 2 t,t.N 61,

(iv) Retainnrt allowance comes within the purview of 3eclion 2 (21L Challhnn Vidltttt Seltkati Lldvoi v. Goocrnmenl Ltbow Offcct, AIR l98I SC 905

(v) RemuneraLjon in case of overtimo work and conrmission Payable to employees arc exclrrded from the definition of "sala ry" or "wdqcs"; AMnrlxt Vollas I volpnrt Emplovecs' Fuhntnn \ voltns Lld , 1973 bb IC 645.

(vi) Ovprtime allowance does not form pa.t of "w'ages"; AssocQtcd Cedenl Co Lld 1J ThPtr Wartnrr'r. AIR 1q59 SC 925

5

(22) wo'd.s and expressions used but not define.d in this Act and defined in the lndustiial Disputes Act, 1947 (I4 of 1947)' shall have^the mcanings resPectively assigned to them in that Act

3. Establishments to include deparlments, undertakings and branches'- l\ |tr ll.rJr^art

br.ilrdlc!,^or

rl|l.JrLr1rr,^be

er'ultlishnre nt ior' {lr(" Pnrfnsr t:t rnttl}-rutation of bonus under this Act:

I ilny accountinS year a seParate balance-sheet^and

FnJlr prepared and maintained in resPect of any such

i *1]n r Ur-anctu then, such department or undertaking or br',urrh rh.;lll hi: trra{td irF a separate establishment for the purpose^of comp[tation of bonus, under this A(t for that year, unless such dePartment^or undirtaking or branch was, immediately before the commencement of that accounting year treated as part of th6 establishment for the purpose of computntion of bonus.

COMMENTS

Branches o[ an e cd as Part of rhe same establishment for the prLrpos€ of computatio in an accounling yeaf' a seParat€_balan(e sheel is maintoine,J ui r.spec ranch shall bc treated !s a seParate estabLtshmcnt; ioi*."\ so^o,yo Organrcs \rulitr) Itd v' Sonlliyo Oryonts (lndin) I-fd" 19-81 Lab IC 363 (All)' lll. Computition of gross Profits.-The Sross profits derived by an employer from an establish-mcnt in tespect of the accounting vear shall-

(a) in the case of a banking comPany, be calculated in the rnanncr specified in the First Schedule;

(b) in any other case, be calculated in^the manner sPccified in the Scc<,rnd Schedule. I

5. Conputalion of available surPlus.-The awailable surplus in resPecl of

"nu ,.aou.,ii,lg year shall bc^lhe gioss profits for lhat year after deducting thJrcfrom thc ir'rms referred to in sectk n 6:

2lProvided that the available surplus in rcspect of th€ accounting^year comnrencing on any day in the year 1968 and in respect of every subsequcnt dccounting year shall be the aggregate ot-

1j irre gtoss profits for that accounting vear after deductint thercfrom tlre sums referred to in section 6;^and

(b) an amount equal to the difference between- (D the rlireci tax, calculated in accordance with the provisions^of section 7, in respect of an amount eqtral to the 8ro5s profits^ot the employer for the rmmediately preceding accounting^yeau .1no

(ii) the direct tax, calculated itt ,'r:r i:r,l;r'tcL' irilir llrr lltrr!')srfrh^or section 7, in resPect of an Jnrotinl r:rluJi l{r lilrl 6rtrrs pti:ltls^of the emPloycr for such ;,rrccdrnF, 'l"oLrrlltrl!l vt'rlr r'tller deductine therefrom the arnrlrnf {)t bonti:i rthir:h th+ cl)rlhr}er The Pavmenl ol Bonus Act' 1965 [Sec.2

Earlier ssction 4^wasSubs- by Act 66 of 1980, sec.3, for $ection I (wr'e-f 21'6'1980) subsfiluied by Act 23 of 1976, sec. 5 (w-r-e.t. 254-19751' Addcd by Act 8 of 1969, sec 2 (wet 26-3-1969)

{

6

the provisions of sub-section (l) of section 32 of the Income-tax Act. or in accordance with- the provisions of the agricultural income_tax Iaw, as the case may be:

Provided that where an employer has been paying bonus to his or an award or agreement rnade

nd subsisting on that date after

notional normal depreciation, then,

deducted under this clause shall, at

r (such option to be exercised once and

ate) continue to be such notional normal

depreciation;

(b) any amount by way of l[development rebate or tnvesrment allowance or development allowancel which the emplover is entitled to deduct from his income under the income_tax Ac[;

(c) subject [o the provisions (f s€ction 7, any direct tax which the employer is liable to pay f

(d) such further sums as are specified in respect of the employer in the 2[Third Schedule]. -^.

(i) Bonus p.

COMMENTS

dcduction under the In.ome-rrx Act; Texlool Co Lld v.

(ii) Alt direc e deducted from the gross prr)fiLs ds prior charges in o . urpose ofbonuj; 1925 LLt{ Bom 1339 rect tax payable by the employer._3[Any direct tax I for any accounting year shall, subiect to the following at the rates applicable to the income oI the employer foi

(a) in calculating such tax no account shall be taken of_

(i) in respect of any previous under any law for the time s;

(ii) any arrears of depreciation which the employer is entitled to add to the amount of the allowance for depreciation for any following accounting year or years rrnder lub_section (2) of scction 32 of the lncome-tax Act;

The Payment ol Bonus Act l s

has paid.or is liable to pay to his employees in accordance with the provisions of this Act for that year.l

u.-.S,"T: deductjble fron gross profits.-The foilowing sums shall be deducted ftom the gross profits is prior charges,a rr rn - h as , namely:_

(a) any amount by way of depreciation admissible in accordance with l

sut's. by Act & ot 1980, sec 4(e), for 'development rebate or development allowance,, (w r.e f. 21-8-1980).

Subs by Act56 of 1980, sec,4(b), for,,S€cond Schedule,,(w r.e.I.2l-8-1960) Eartier rhe words

"Serond Schedrde ' were substituted by Act E oI1976, sec. (, for the words ,,Third Schcdule,, (w r.e.t. 25-9-1975).

Subs. by Act I o{ 1969, sec. 3, for "For the purposc of clause (c) of section 6, any direct tnx psvable by the employer" (w,e,f- 26-3-1969).

l

2.

7

(bl (i] {iiil .rny r".trrnption cr:trlertud or the ornl:luvL'r urd('r \e( titln ll+^I lhc lntttnrr:-lar Act ur of nnl ilr(l$(ti(xi lir whirli irc is t'ntitl':ii undcr sulpsctti{rl {1} $, vritiotl l{Ji^(,1 tll¹i\rl, d! rn lorL{l inrnreillatrely beftru tlu cun\lnsrletnt'r1t ul tlti'liitr;ncr' A.L,^l9$5 (10 of l9{i5};

ilrt{rrss{*d wilhin thr me;rninE, lrf lhJt A(lj

rrnl iv jded l;'rtrrrll, fftr:

le b e"l'lx A't sh;rll^be

1;n [n' hirn frum litt'

cs|.lblishnrnt

x{htr* llre jtfi olil\ 'rnd Biirli

ijerjvccj frgnr Jit'oul l]'rf lndia

.rtlil ;inl. rel)n ll!- hw lur lhil

lirnt hding in krrc$ relnting t(r dire(l l xrs, then. rrl;tttiiunt llr':ll^tri:

{lrkon t]}f ttrdl r{hatc;

(a) fraud; or

O) riotous or violent behaviour while on^the premises of^the establishmenu or

The Paymenr ol Bonus Act,¹⁹⁶⁵ls€c,7

5, for "(othe. lhan develoPhcnt t€bate or develoPmenl tdl

{e} n irctoun{ stu l€b"rte I lir'n

r{tlittt (lt ltllir {)I dfv t 'li

rrtdit tr n:liPf t lrcrcil ]lr('rtt

st'di(fi) ill llrl'l Pa!'mrnt tll lnl tlir'rtt ilx ollor.'t'ri lltrd( | 'rn\ lr''\ i.r thc li$rt' 11{lin$, in ibrce rukling t{r dir({! t;l\ul' or tlllricr lhr relf '' ']r.lt )" i11{il l!ll \

g tled to be Paid bY his

empl^the Provisions of this

Act, establisl"ment for not less tJran thirty

working days in that Year.

COMMENTS

i;: il..lrr]n * tjrl"r'::r' r.vlrr. hatt *r)*r'd, tur turl k'ss ll r1l 30 It rb i il;\' nre cntiued to bonlrs; /K. rir*,;:rr1 Ir lrrrrrlrf frilrirl r. i'ri,,7 ir l.r?li,irrr {.4trl- ilq9Ll i!:^frl lL:tl: (Bom)' irir r1','.tr.r: $ h,r fi^1'1, .)Ptin! h, nlltrlLl t{l l!{tl\ itl lh't' i'l l'rrt prl'rr1i!{E aro ehhtled to bonru' Kdc ,\:;$! ,fr,::]J;. tln.ri/ " lrtrst fJr;fi ,1'!rr;rrr'. llrrri|, i9F{ i''tr lt lri:I] -'i;ijf,"pf"u"ot"orkrngonPart-timebasisarl'!hFihhl\rt'iirrrr:,'1';'r'"lillsItd\LChatdn Poglnd C.'[tit'cdt, (1976)³²FLR 323

(n,1 a probationet Li eliSible tor bonus; Bcnk ol Madua LtJ 't Bank oJ Mdun Lnfloves' Unbn'

1970 Lab IC 1215.

(v) Everv crnPloytl' r5 .'nh li.d i* hrltnt. i {tu'\r:r;r^ir rles Work v Ll ian aJ I din AIR 1966 Ker 143

i. Oisquatlfiiation tor hon{ls.-liuhr-ithstanding anything contained in this Act, an employee sh;lil br dlsqunlitir-'i-l ironr rcceiving bonus under this Act' if^he is dismissed from service for-

1. Subs. by Act 66 of 1960,^sec allowance)" (w.r.c f 2l-6-1980).

8

The Paryent ol Bonus Act, 1965Sec. 111

(c) theft, miSaPProPriation or sabota8e of any property of the establishment.

COMMENTS

iJ Lrefully gone through a distinction cannot be drartn -. ; Ue'orier of terriination or Prior to thc ordet^of ^-r

LJ66.6 rrrArdrno

n^e

le"rmioation ona thc bar is apPlicable 1o tn" Uon* "i s""ftfayable .undel the A(t Hen(e' awaldrng ;;;;il;i;;..k-r^, on fa?is, is sustainabie in law; Kr; Piait'cs t'td v ltbou courtltt Hydcrubod' i"U, U" na^{fg of} 1980, lec 5, for section l0^(w t'e t 2l-6-1980) Edrlie! seclion l0 was ii1.'"a11 ii

^"i

si

'

( tgzi, *r"z t* "'t'

tg 12-rs72\-and bv Ac.t 42"of 1e74' sec 2 (w'e.r 1r-

i:i,)iii"i^*";i'*ht,t"a uy r.i z: "t 1e76, s< 7 (w r e I 25'e're7s\' SuOs, iy,qa 6O of t98O, s€c. 6 (w r'e t- 214-1980) E€rler scction l l $'as omitted by Act

23

ol 1976, sec. a @t.e 1 254-1975\' 2m2⁽³⁾ LLI 619 Boo.

(ii) Bonus can be forfeted undcr section 9 only with rcference to accounhnq vear in which thc

"-"i,?;.;;;;;ii.i,'in.o^{"* ,} iiii"l, vifr's coi i' r'o ' znd Addt Laboli Coua" (leg6) 52 rree during the accounting year or^one

,ihether oi not the emPloyer has any

not comPleted fifte€n years-of.age^at

orovisions of this section shatl^have

t1re words "one hundred ruPees", the

COMMENTS

Ex'stulio bo^ns is not a bonus within tne meaning oI seclion l0 of Lhe Act; R P C Offcers' tssocintin v. R.P C., 1990 LLR 222 (Raj)

the accounting Year subject

wa8e.

sectlon, the amourt set on

isions of section 15 shall be taken into

account in accordance with the Provisions of that section'l

STATE AMENDMENT

Section llA Maha!{thtrar o thc State Alter section 1l of the Payrncnt of gonus o[ Maharashtra, the following seclion shall^be 11A. M.r,jt { ruflts undet this

Act shall be Ni tr lNI'^Y

crediting

the same in llr |! rrlr - ,

[Vrdr Mah t sec z lw e't' tz-r'zvttt t

COMMENTS

BJnus in cxc€ss of.llocablc surPlus €arurot be claimed by employccs; oicntal Machinefv & ciuil

c*ri,,rliipot- Ltd v- The 2nd th,;slial Ttibt/nal' West Bengal' l97E I'ab lc 586 (Cal)

9

12

The Payment ol Eonus Act, t96S lsec. t2

Ssa,

(

alloct bo,nu is n0 sectic bonu

be ca r[12, Calculation of bonue with rc ectiorL the expression "scheduled as assigned- ta it in clause (t) of l1 of 1948).1

bonus in certain cases.-Where an ana

may

ofw

natel

In the ca-s€ ol n

CoMMENTS

ound,*t rtr{., -,$u ii ! lifirr' in nny accolurHng l,$.nr' r+lictr-iS* ernprtop,. Jn*.inrL.l is aclually allowljd tr s.,ra. Lrl, !rr'-."rtut l9d5 s. 7i$, 14, ('.rnrFulatton of numher of w

13, an emptivee rhall be dr"*nrr:d to

accounlinfi ydar nlso {rn thr da}.$ on

1.ri hc has lpen l:id of f under

orders under the Industria

1946 (20 ot 1946). or under

1947), or under any other I *r rlu *rtri:lkllnrrnl;

(b) he has been on leave with e;

(c) iu' to temporary disablement caused bv .r(Li in the iourse of his employment; and'

(d) the maternity leave with ialiry or wage, duf

s[15. Set od , ,'Jt, Whcre lor any rFI d)r mat.fii$m bon i t0

tion 11, thL"n, ths e ll.

Itrt.rl s,rlarl or wJgc ot tht'enrplrrvccr rrunling rr',rr, t'"' r:.-rrritrl i.rrr.lrr.l lor eilr and^g{} (:fi ufr lu and vr r:ll nrF F rF{}sll of p vlnrnt us in

ulc.

up to

Iroutt

li

shall ,

the p

({

ser o!

actou

accoll

'tt

r.l,, uu

oI n%

] LLI

1t

an esl this A under and (l

0,

the er sewicr

i. re6l establi provis of sect

(11

in^whi render section

25

.i. tot)a bt Afl th $l lSSt|, i.fll" i|, J,ur s$rtj{rn 13 (rf,!.r-t .!I-8-lqSUi frrli}r *-!ti{rrl 1:} !v.ri bl A(-r 6li ol l-qZ?, rtlr, ,1 ($-.(.f, tS"tt-t$?:J. tr! ,\rr ^r* dl tp?1. s{,!. t} t$...t, 1"4-!ty.t; !t.12{rilf/74"sg.,f irv.e"l', l l .!}. 1!}74} nnJ rvnr rul}iritu i*il tr r Ad l"}

5. Subs. by Acl 66 of 1980, sec. 9, 60r s4tjon 15 (w.!.e-( 2l-6-1980). Errlier section 15 was subslitufed by Acl 23 oI 1976, sec. ll (w.t.e.t. 25.9-1975)

Soc 161

The Payment ol Bonus Act, tg6, Itl,Ll:,:",,,?:^"i:^,^.-:':,'ll1q ]r1r,, rl1er1 ,* Irn J..1iLlr5ti. :u,r,,,t\ o, L,a(. it]T.lhl. surptus in respecr or ,r,uj i*, oil, i,ii;, ;;; ;i '"..;;.,,;i'iL'l;,i"1't,r*tbonus Payable to the employees in i(: est,,rtr]!{}rrrrr"-, ,,*,t.".""..,,_.... pa l"otlr{h rLlr*Li }e.

l:b^s,bl_1Act²³ot 1976, stc l2(a), for snb-scct;o (1) n^d Eltldnttiohs rh{irck) (!1,.r,c f. 25.9-1975\

Subs. by nct 66 of 1980, scc, 10, ft)r ,,Thrrd Sthrxtute,, ($,r'c.f 2r_8-19g0).

13

|:ij f1y^1?]:^{l c..i,rhq}{,l,r ,,n,t"r-n*.iii.,n I ,;rnd Lhi:(15 no amount or sufficient amount cJlrj{{J folrrirrrj ,;;1sJ sui {Jt1 rirriiiir !,!f\Sv fi1

liUliitr :iu r ll.:]:::'l ll.:ll:llcrrutd Lrr: rrrjtisert liir rhr: ;lrrprr:s4 ,rr s..,,ir*.,i.'.,,, Lht nrjr.rrnrrrr.:, ll,l:l:: lll'::-irl:,,,rninrmrnr :rmr)rrnt o-r,,iJ"ii,:i-,",,i,' ;i;:i,,; l;i:,;';ll':li:i;ht'r',lrrrr,"l hrr'..,,1rd frrr l.reing scr oll in ,fr" l:,ru.i",.fi,ii'"

".,,,tr, iig

',

",,,: ,,,,i "., u,,.r {ll' fil' tnci::tsil.r {]f thr ltrurih at-crtunting !,(,.1r in {hr,rilitru{:f IJhr{tr;.i16, inrf.,lrrl]r'{'l ill .:tr.lrt,(l I lltl'^ruprr.,r i l r r. o t iir c rt tirr

,

ff as illustrated in the Fourth Schedule by srrLsection (l) or srrb_section (2) for thrs Act.

ny amount has been carricd fonvard and in calculating bonus for thc succeedinc accorrntjnt year shaI first be raken ,","

t?l8l'"tTt'"0 forward from the earliesi - ,Linbdit'^,>f payinS bonts has with r€fclcnce to !€dio^s l0 and Il,/.', thc employcr is bound to D.\' 4?o of wages or fhc rhaximurn bonus of 20'2, or r4arcs in acmunrine vta iri,i, t)Ei* ir, Lrd. v. C t.7.,(19s1) I LIJ .l4l (Cal). lii,.5pc':iil trltovi$i{r shments,_1[(t) Where I I'N,rbliiltrnf nt a$ ntt!, the commencemenl of ii 4it. thr rrl.,lti !'{_'er titled to be paia bonus r |r ti s Aft ill ,hr-rl ub_sections. (l A), (lB):rrxi i ir-,. provisions of this Act in rehtion to that year, but without applying the provisions of section 15.

tr, "t'

,"^ot

'I'l

may be, shall be made in the manner

ulel taking into accounl the excess or

ay be, ol the allocable surplus set on

and sixth accounting yeais; \',/ ar-

irrustrated in rhe 2[Fourth sc."T:[ft -:l'Ji"T #::#J::il:$;

!:t::llftf lly. 1' r.h.q .o;:9 TuI Lc, or ii.," oil;;;4" surprus scr onor ser olt rn respect of ihe fifth, sixlh and scvcnth accounling ),ears.

I

z.

11

l4 The Payment ot Eonus Acl, 1965

(Sec. 16 (lC) From the eighth .rccounting ycar following the accounting vear in which the employer sells the goods prodtrced or manufactured by hirn or renders services, as the case may be, from such establishment, the provisions of section 15 shall apply in relation to such establishment as they apply in relation to any other establishment.

Exphnation I.-For the purpose of sub-section (1), an establishr:rent shall not be deemed to be newly s€t up merely by reason of a change in its location, management, name or ownership.

Explanation ll.-l.or the purpose of sub-section (1A), an employer shall not be dccmed to havc derived profit in any accounting year unless-

(a) he has made provision for that year's depreciation to which he is entitled under the Income-tax Act or, as the case mav be, under the agricultural income-tax law; and

(b) the arrears of such depreciation and looses incurred by him in r€spect of the establishment for the Previous accounting years have been fully set off against his profits.

Erplanntion ///.-For {lT r Furpurtc$ ol sub'sfcl i$rr:i { lA), { I tsi snd I I t]J, .sitld oi the goods produced or mnnufarturtd duririrg lhr" mur"e oI lho lritl r nning $l;in\ factory or of the prospeclinl! $ta$c oi ;rr'rv mini: fur arr ci{"ljtr}rl slr,lllf nu* be urketr into consideration and whoru anv q[()*tifn rrises u'ith rcgnrd in su{h pr{]du.ti{}n or manufacture, the decision of the appro;rr

1, (l A), (l B) and (1C)l shall, so far as may

be, apply to new departments or undertaking,s or branches set up by existing establishmenls:

Providcd that if an employcr in relation to an existing establishment c,:rrrristing o, difirr{rt1t liepnrh cnts {tr rrndertakings or branches (whether or not rn lh{: tirrr{ i drrarli s,:t rrf Jl dittcr$rt Periods has, belore the 29th May, 1955, [' r in* l...rlru-c 1i-1 t]re cmFlofcos r.lf all such departments or undcrtakings or l.r s i1.r,{r{,rliv.. .r[ tht iinh'r {!rt 14'lich such^ri-spo,rtivr^lr

departments or underlakings or bl;nrht,li 11"rrrr sut u F,^(x1 tlrc ljir$i$ df thij consolidated Profits compu^{ted in} resPcct i.rf ;rll rilr drlp;:rrtnlr"r'rl$ {r $nrtrcd;rkttrSs or branches, then, suclr gmployer shall br lirbl* 1rj tri;r-r, bonus i;r.iccordlnec with the provisions of this Act to the employees of all such departments or undertakings or branches (whelher set uP befbre'or.rfter that datcj on the basis ol thc coniolidated profits compured as aforesaid.

17. Adjustment of customary or interim bonus against bonus payable under lhe Act.-Where in any accounting ycar-

(a) an ernployer has paid a y pujn bonus or other ctrstomary bonus to an employee; or

(b) arr employer has paid a Part of the bonus payablc LInder this Act^to an employee before the date on rvhich strch bonus becomes payable, th€n, the employer shall be entitled to deduct lhc amount of bonus so paid from the anrount of bonus payable by hilr to the emPloyee under this Act in resPect of that accounting year and the employee shall be entitled to receive only the balancc.

I Srlbs. by Act²³of 1976. sec. 12(b), fot "sub-se

12

Iie€. ?01

The Payment ol Bonus Act, 1965 Subs. by Acf 23 of 1976,6ec. l3(a), for "(l) Subicct to the provisio.ns of tt\is section all amor:nts". Earlier section 19 was amended by Act 68 of t972, scc. .t(i) (w e.f. 19-12-19721_

trrh"t{'diL,n! l:l {{' iil omitted b'l Aci 23 ot 1976, scc. 13O) (w.r.e f. 25-9-1975). Eartier ,rulLc,.(li1nr ilt td /;: were inJerted by Act 68 o( 7972, sec. 4(ij) (w.e.f. g_12_j972) 5ulr-r|rrf.n iB,r Nr.rrttt\.. by Adt 55 of 1973, se<. 2 (w.t.e.I l4-t9731. Earlier suFscction

15

(i) Claim of annual bonus -", .oo*too,H*Tltour qurMied by negoriarions/sentemcnts held io be custodrary in nature and not statutory bas€d only on seiiternent linked with pNductivity or prohb; Mutund Ltd v. Mukund Kamgor Union, iOOf tU) t-t_J 4lO olom).

. (ii) Paymcnt of any crrslomary bonus, such as ahcnda^ce bonus, istival bonus, or fhe [kc,clocs.not ab:olvc the manrgedcnt from their lirbility to pay statutory b,)^us) Badythlth Bhdtfltl Mazdc,ot Union v. Eaidvantth Ayuruedt Bharpn pot, UA.,'IItts. tab IC 14S,

(iii) The employee is bound to rehrnd the ex(ess arEunt ol bonvs; bndra Lnrinretinl & Foundary Works v. Stat? of Punqb, egmr 33 JL 538 (p&H).

18. Deduction of certain amounts fmm bonus payable under lhe Act,_ |.Vherq rl any accoun t ing_ yeat, an employee is forrnd guilty of misconduct ca using lrnanclal loss to thc employer, then, it shall be lawlul for the emnlover lo dpdrrclfi i € ry the amount of loss Irom the amour

p y t e u l

nt of bonus payable by him io [he emp]oyee

under this Act in respect of that accounting yeai only anci the emplovee siali bei t r y

entitlcd to receive the balance, if any.

19. Time.limit for payment of bonus.-I[All amoultlsl payable to an loyee by way of bonus under this Act shall be paid in cash bv irisemplover-^emp

i y i y _

(a) where there is a dispute regarding payment of bonu3 pendirig deforc any authority under section 22, tithin a month from the late on wfuch the award becomes enforceable or the settlement comes into _ {!|rr,rli{n, in rpspe{l of srch dispute; (b) in anv otlurr mlc, rvithin a period of eight months from the close of as the

lication

he said

fit; so,

hntu"9-",9l, that the total period so extended shall not in any case exceed h/yo years. 'r*l3[.'-l

STATE AMENDMENT

Maharashtra:

In section 19 oI the Payment of Bonus Act, 1965 (2t of t965), the words ,,in (ash,, shdll bc deleted.

lyry'. Maharashka Act No. III of 2011, sec, 3 (w.c.f. 12-3-20 ).]

20. Application of Act to establ ts in in risci.rl(1)l If in any accountinB year an e mr.nt .rr.ll r(x.)i.rJ produced or manufactured by it or rendi rrrl: ,:n ioiih .'r,.,

establishment in private sector, and ihc inccnrr: frnm sr!ch sal€ rjr servic(.: or both is not less than h/r'enty percent. of the gross income of the establisfunent in public sector for that year, then, the provisions of this Act shall apply in relation to such 1980, sec

by Act

1.

2

3.

.l- ii ,virt ir:lrrtijd hr ict 39 oI 1973, *r.. 4 l!F.e.f . 14-t9?3). Settion 20 re-numbered as sub.section (l) thcreof by Act 66 of 27-12-1sBX). Earlier the brackeh and figu-re "(lJ" were orni ed se'c. 14(a) (w.r.e.l 25-9.197r,

23 o{ 1976,

13

The Paymenl ot Eonus Act, 1965 lsec²⁰ cstablishment in ptrblic sector as they appty in relation to a like establishment in srtb-s{'ction { l). ntrthhrt: irl tili}i A{l 'h'lll

r\, n{ llrtl tnlrnrj! drll] lo hr'!lt, 'llld^1l

ll- ns lh.' Jplirofrli!t"⁽ '{l1fr]]n1t'lrl

\: r!t(.rnNr!"rl {o drtr,t, i! slull trrur 'l

r who shall p16r;9crl trl ror:(lvt'l lh(' iJlll{

in the sarne manner as an arrear t n'.l i"rfit""iade within one year from the lh* nnplol'*tl [r{)! lhe rlllplllt'1':

lietn m.rv [rt- r'ntcrtlilrnl aitcr lhrr cxpirv

roprirt{ i;o1'{:mmil!1t i:l s;1ti$fiilJ lhnt llr{:

miking tht nFplii.ilirln rvilhrn lht' rrril

iorc^22, 23, 24 and 251, "emPloYcc"

ent of bonus under this Act bul who

Act.-Where^anY

Pect to the bdnus

Act to an esiablis

rial disPute

, or of^anY

Iial disPute

aY bc, such

ordinglY.

iii, ,n" c,'-p"*.t rribunal will havc iurisdichon u'-'ll1:lT-ll ,i:1-ii"^1:::,::.iP.::;tfl' ^ut<Lvx'rtrr"r i1iii" r,.auuaon EnFloytc| lrr'nn ! Mahnmshtro co- disputc rais('d undcr this sr'cli'rn;. nF" , _ , ,;..., i"'du"i''i.*^- u"rinng teduitrcn Lt'J., (ts88) 56 Fl-R 29e (Bom) - -;;- r,:-:.:*-r:^- ',-+'n"t accuracy of balance-sheet anra t-aarrsnli^n

".ii".y'"f 'balance-sheet d profit and loss

COMMENIS

(i) lndtrlitrr,rl lribunal has iur|"qdtcti'm to Srant intcrcst on bonus award'irdi LID Panlv natij tul. v. t',.ustndl Tribunll. \lggl) I^{LL, 250}(Mad)

,,0 totp'"ni"t'-(1) where' during^the course of trator or Tribunal under the Industrial Disputes^AcL i',. -n.11 -.: f !976 sr":, -14{t') (wr.cf. 25-q-1975) 2 lLri,. l,r ,{!r t':r, ',1 lr'rlrl. rt'i' l:' rr'r'!1lri''1i ll L:.1 nrrtl ::' :":ri-f..-,1 ! r!J{r: l:rrlr':

- ,f*.. ;"ra- rverc.rmcndqi by Act 23 oi 1976' scc l5 (w r' f,-:5-9'1975] ^-^,^.=, i|'*. ,'y

"., 23 cmPanies'-( l ^{W r '}

.-rlomon t .f indrrsltial disetllement of i u lri l i , ii;;"i ;' ;i;.d;;14 unJ zs;'"t""ed to 1s, the,"said L'l i!i"l:l,:1,:':':lfjy i;;"";'..)iil; ';;;"i. #..iri"i il1 t"ttion

22 has beert referred' the balance-sheet

l. lns. by Ad 66 of 1e60, $ec ll (w'el T:i3:1]-'.ol

Earlier suFscclion^{2} wns omitlcd

.4

14

17

and fan corporation ora company (oth , du Comptroller and Auditor- Gen dul as auditors of companies und 226 he Companies Acl, 1956 (t ol 1956'), arc produced before it, then, the said arrthorify miy presume the statements and particulars contained in such balance-sheet and profit and loss account to be accurate and it shallnot bc necessary for the corporahon or the company to prove the accuracy of such statements and particulars by the filing of an affidavit or by ant' other modej

Provided that where the said authority is satisfied that the statement and particulars contained in lhe balance-shect or the profil and loss account of the corporation or the company are not accurate, it mly take such steps as it thinks necessary to find out the accuracy of such rtatements and particulars.

(2) When an application is made to t}le said authority by any trade union being a party to the dispute or where there is no trade union, by the ernployees being a party to rhe displrte, requiring any clarification relating to any il.em in the balance-sheet or the profit and loss account, it may, after satislying itself that such clarification is neces-sary, by order, direct the corporation or, as the case may bc, the company, to fumish to the trade union or the employees such clarification within such time as may be specified in the direction and the corporation or, as the case may be, the company, shall comply wjth such direction,

COMMENTS

The nuthoritv has to pre$ume lhe statemcnts and paaticulars conlaincd in the Balance-sbcct and the Ptufit and l,os,s Ac(ount lo be accurale unJcss the opposite parly applieli for cfnrificaHon; Wo*nen oJ India Ccwcnts Lli v. Indio Cemenls Lld,, (1984 57 Fl-R 349 (Mad) t[24. Audited accounts of banking companies not to be questioned.-(1) Where any dispute of the natur€ specified in section 22 between an employer, being a banking company, and its employees has been referred to the said authority under that section and drrring the course of proceedings the accounts of rhe banking company duly audited are produced before it, the said authoriry shall not permit any trade union or employees to question the correctness of such accounts, but the trade rrnion or the employees may be permitted to oblain from the banking company such information as is necessary for verifying lhe amount ol bonus due under this Act-

(2) Nothing containedin sub-section (1) shall enable the trade union or the employees to obtain any information which the banking company is not compelled to fumish under the provisions of section 34A of the Banking Regulation Act,7949⁽¹⁰ of 1949).1

25. Audit of accounts of employers, not beint corporations or companies.-

(1) Where any dispute of the nature specified in section 22 between an employer, not being a corporation or a company, and his employecs has been referred to the said authority under that section and the accounls of suclr employer audited by Soc. 251

The Paym€nt of Bonus Act, 1965 rlv oualified to act as auditor of comoanies under sub-section⁽¹⁾any auditor duly q p € ⁽⁾ of section 226 of thc Companies AcL 1956^('L of 1956), are produced before the said authority, the provisions of section 23, shall, so far as may be, apply to the accounts so audited.

(2) When the said authority finds that the accounts of such employer havc not been audited by any such auditor and it is of opinion that an audit of the accounts (w.!.c.f. 2l-&f980). Earlier scclion 24 lvas omittcd b)

25.9-1975).

Act 6tl oI 19E0, sec. 1,1

ot 1976, scc 17^(w r.e.t,

I Ins, by

Act 23

Th€ Pavment ol Sonus Act'¹⁹⁶⁵lsec.2518 of such cmPloyer is may'

bv o.d.r, d'ireit ttte maysuch be spccttl('d ln. tne with

auditor or auditors

in dctnull ol *rrrh p;lvmenl shrll trt recov s, etc'-Ever1' employer shall preparc other docttments ln iuch form and in ernmerrt may, by notification in the thinks lil 16 be InsPectors for thc its within which they shall exercise iurisriiction

'"""ii'i i"' tn.p*ctor appointed under sub-sectiotr (1) may' ftt -t1"-n:jq:]::. "t asceri"ining whether any of the provisions of this Act has bern compltccl wrtn-

(a) requrre

"n "rnptoyt:i to fumish such information as he may consrder (c)

Iound in charge of^{the e}

therewith or ;n,1' Pcrs0n^\{'

believe to be or !o ha ve^bet:

(d) make coPies of, ff {elitl c:( document m,'ifltiinrd tr. t* ,, -"" be prescribed. to be a'public servant within thc mcaning e any accounts, book, register or othcr Inspector under sub-section (l ) shall^De legally bound to do so' ''"-iii5i -1'.rotttl"g contained in this section shall enable an Inspector to requlre a

lr""kii.;;;;;;y o fumish or disclose any statement or information or lo

'1. lns bY Act 66

by Acl 23 of

of 1980,^scc

1976, sec. lE

15 (w.re.f 21-8-1980) Earlier sulr-scction (5) wns omitted (w i.e.l. 25'9'7975)

16

Sec 3Ol

The Payment of Eonus Aca, 1965 19 prduce, or give inspection of, any of its books of account or other documents, which a banking company cannot be compelled to fumish, disclose, produce or give inspection of, under the provisions of section 34A of the Banking Regulation Act, 1949 (10 of l9a9).1

28, Penalty.-lf any person-

(a) contravenes any of the provisions of this Act or any mle made thereunder'; or

@) to whom a direction is given or a requisition is made under this^Act fails to comply with the direction or requisition, he shall be pr.rnishable with imprisonmenl for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.

29. Offences by companies.-(l) If the person committing an offence under this Act is a company, every person who, at the time the offence rvas committed, was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such oflence.

(2) Nofwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that thc oflence has been committed with the consent or connivance oI, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explnnation.-For the purposes of this section,-

(a) "company" means any body corporate and includes a {irm or other association of individuals; and

(b) "director", in relation to a firm, mcans a partncr in the firm. .A crircctor or a company ."*", o":fl}1l5T,,tnta companyj si?'rh s'th chcnt.t v Laboul ca tt, (19E6) I LLN^e3l.

30. Cognizance of offences.-(1) No court shall take cognizance of any offence punishable under this Act, save on complaint made by or under the authority of the appropriale Government l[or an officer of that Goverrunent (not lrelow the rank of a Regional Labour Commissioner in the case of an officer of the Central Govemment, and not below the rank of a Labour Commissioner in the case of an o[ficer of the State Government) spe€ially atrthorised in this behali by lhat Covemmentl.

(2) No court infcrior to that of a presidcncy magistrate or a magistrate of th€ first class shall try any offence punishable under this Act. l- lns lry Act 66 of 1980 sec. 16 (w.r.ef.21.8-19E0).

17

20

The Payment ol Eonus Act, 1965

lsec. 30

(r) rhc p(,rn d of limitation f". fltt'tgc:#il^1[S,n c,ir,.innt court is thc !ianr(' ns hls bccn sp( (ili(d tn section {69(l)(a) of the Codc oI Crimirl?l Prcrcdrrre, 1973; AL'n|h D?r.lop'tu:nt (:o Lhl \.5t tu oI Mdharnihtn, (f98E) 57 Ft.R 548 (&,m)

(ii) Ihe Latour (rmmrssioner is emF)lv.rod to filc comphi|lt$ for proseclting offendcrs Also, h(. c.rff nuthorNe n thrr.t partv to do so;,4.nnt Dtttlopmnt Co l.ti v Slnt? of Moh.troshtm, (1983)

57 Irl.R 548 (Bom)

31. Protection of action taken under the Act,-No suil, Dtosecution or other lcgal proceeding shalt lie ag.rinst the Covenrmcnl or ;ny officer of the Covornment for anything $'hich is in tood falth donc or intended to be done in pLrrsuance of this Act or any rule made thereunder.

r[31A. Special provision with respecl to payment of bonus linked with produ(tion or productivity.-Notwithstanding anythinB contained in this Act,-

(i) whc,re an agreemenl or a setflement has been enlcred into by the employees with their employer before the commencement (,f lhe Payment of Bonus (Amendment) AcI, 1976 (23 t>I 1976), or

(ii) where the en'rployees cnter into any agreemcnt or scttlement with their cmplover afler such commencement,

for payment of an annual bonrrs linked with production or productiviLv in lieu of bonns based on profits payable rrnder this Act, then, such employees shall be eDtitled to receive bonrrs due to thcm r.rnder such agreement or setllement, as the casc nray be:

r[Providcd that any such agreement or settlemcnt whereby the emplovees relinquislr their right to receive lhe minimum bonus under section'10 shall be null and void in so lar as it purports to deprive them oI such right:l jJl)rovided frlrther thatl such employees shall nol be entitled to be paid such bonus in excess of twenty per cent. of the salary or wage earned by them d[ring the relevarrt accoLlnting year.l

32. Act not to apply to certain classes of employees.-Nothing in this Act slr.rll applv to-

(i) 1[*--] employees employed by the Lifc Instrrance (iorporation of Ind ia;

(ii) seamcn as defined in clause (42) of section 3 of the Merchant Shipping Acl, 1958 (44 of 1958);

(iii) employees registered or listed under any scheme rnade under the Dock Workers (Regulation of Employment) Act, i948⁽⁹ ol 1948), and employed by registered or listed employers; employees employed by an establishment engaged in any industr_y carried on by or under the authority of anv department oI^the Central (lovernment cr^a State Government or a local aullrorily; emplovee.s employed by-

(a) the Indian Red Cross Society or any nthcr instihrtion of a like natLrrc (inclnding its branches);

lns hy Act 2j of 1976, sec- 19 (w r r.f. 231-1975). lrls by Aci 6(r of 1980, sec 17 (w,r c f 21-8-1980), Subs by Act 66 of 1980. sc(. 17, f(r "Provided that"^(rv rc.f 2l.5-1980) Thd h,orcls "emplolces culployed by nny insure( carryin[i or] gcncr:rl inr^urancc I'usincss .l|\d the" or)litled bv Acl 62 oi 196ti, sec.41

(ir,)

(")

I

2.

3

{

Sec 321

fhe Payment ot Bonus Act, t96S

2l

(b) universities and other educational institutiorls;

(c) institutions (including hospitals, chambers of commerce and social welfare instiiutions) established not for Furposcs of profiU employces employed by the Reservc Bank of India; employees employed by-

(a) thc lndrrstrial Finance Corporation of India;

(b) .rny Financial Corporation establishcd under section 3, or any Joint Financial Corporation established under section 34., of the State Financial Corporations Act, l95l (63 of 1951);

(c) thc Dcposit lnsurance Corporation; 3[(d) thc National Bank for Agri4ulturc and Rrrral Developmenb]

(s) thc Unit Trust of India,

(f) thc lndu-strial Dcvelopment Bank of India; {[(fa) thc Srnall Indrrstries Development Bank of tndia established under scction 3 of the SmalI lndtrstries Development Bank of lndia Act, 1989J

s[(ff) the National Housing Bank;]

(g) any other financial institution 6[(othcr than a banking company)l/ being an establishment in public sector, which th; Ccntral Govcrnmcnt may, by notification in the Official Gazette, spt'cify, having rcgard te

(i) its capital structure;

(ii) its objectives and the nature of its activitiesi

(iii) the nature and extent of financial asslstancc or any concession given to it by the Government; and

(iv) any other relevant factor; 7[*"1

(xi) employees employed by inland water transport establishments operahng on routes passing through any other country.

COMMENTS

(i) Appcllant lvlcdica) Collcgc.rnd hGpih'rl was hcld ro bc nr,ithrr irn edrcatior[l instikrtion comin8 undcr s4ction 32(vxb) of thc Paymt'nt o/ Bonns Act, l9(5 nor n hospital which was run on a non-profit basis; CrriJllr[ Mtdiinl Colk|t nnd Hospitol e pr(rrdfir.{ OlltL,r, hld slri.ll T bt lnl, Mdns, 2tn3 (lll) LLJ 650 (Mad)

'I C-la($c (vi) omittcd by Act 45 of 2007, sec 4 (*..rc.f t-4-2005). Clausc (vi), bcforc omission, stood as undcr.

"(vi) ('mpl(,yccs employcd through contractors orr buildin8 operatnns,,,

2 Clause (vii) omittcd by Act (# o/ 1980, sec t8(a) (w.r e f 21-8-l9BO). F_arlic,r cliru$, (vii) was snbstrluted by Act 23 of 1976, scc 20(a) (w re.f 2t9-1975).

'[-*],[*.]

(viii)

(ix)

l < r

I' r i , -3

6_

7.

Slrbs b) Act f,1 oa l l, scc- 6l nnd Sch ll. for sub-clarrru (d) lw.c_f l-tt9lt2) lltq- by Acr 39 ol 19E9, sec. 53 and Sch. II ($,eI 7-3-1990), Ins by Acl 53 of 1987, sc. 56 and sch Il (w.c f- 9-7-1988). Earlicr sub,clausc (ff) u,as ioserted by Act 23 of 1974,, !rec. 20(bxi) (wr.ct 2U9-19?5) and wa$ omittcd bv Acr 66 of 1980, tr,c I8(b)ti) (rv.r c f 2l-8-1980)

hr,r by Act 66 of 1980, scc. lE(bxii) (w.r.c f 21-8-1980). Earlior the words,,(,rher rhan a banking compnny)" wcr€ omithd hy Act 23 oF 1976, lr:c. 20(b)(ii) (wj.a t. Z5r)-t975) Cl us. (x) (,mrttcd by Act:3 of 1976, s€c 20(c) (w.rr.f. 25-9-1925)

19

(ii) Tamjl Nadu Watt'r SuPPly and Drarrnge Board is an institution-cstabLshcd for the or.rrposcs of profit. lt |s, therefore, not cxcludcd from thc Previcw of s€ction 32 rr) (c) oI lhe A(t, ii,,i,i i",tl"'wntt, supi'tv om! Lramn1( Ecard e Tdn Nnlu tt'tnter Sr4tplv 'tn; Dranaga knnl Enrtt.trc' Assott lrcn, 1998 LLR 417 -

^

'iuil

f i".f*" if.'".-l"g no"'a cannot bc rrcltcd to bc * local authority within the mcaning of scction !? (i.'j of thc Act; Forlsui.q Boad oJ Llaryuna v llnry'1te Hot/nng Board LmPlcJeB Llnion' AIR t996 sc⁴³⁴

(i") lnsfitutrons desiSncd for cnrning prolit should Pay the rhirimum bonu6 io their ernpl'r''ees; fn iitfi ii,ppty C' orni'nage ao,,,a Engini"s Assot'auin v Goocrnnotl o/-fomtl Ndd'r' (1991) "

I-LI

19{ (N'lad).

i1'r llrF i,r i:. rrL't,lfplr1:ltr^tr) 't{enF !!t Sute (ii;r{rI.rr:nr;: '{ lrl'r"rrji'r'r r}'l- |^r'll

tgEl^{5C 951}

r';,i, lrlrlrrrtlr'ir* srulr:rr hurlrrili s'riirj *rlirr; lrrrilhrlil'"ri _!rii \fi:n!lr'rri Lrl L lult'jrt'"tri' ,,,,'".''1,'i ,,';,'.','.,',;'I.rl rurrirr s.r i!;rr' 31 :'l'irlr r'!n""?{$}'r It'trr'ii1r inr';':l ! \'l i- i:l'l'':r' 'l'r'11 I l,t-J 162 (Rom) (DB)

33. Act to aPPly to certain Pending disputes r€8-ard^ing PllJnent :l bonus.-[Rr7.^bv ihi' i'nymutt of Botrtts (Amenrlnettt) Act' 197b (23 ol 1976)' \t:r 21

ku.r.c.f . 25-9-1975) |

r[34. Effect of laws an the Act'-Subiec{^to

lhc Dlovisions of sectron ct shall have effect r"ii,r..irlJi"r ""yitt,"g

i. arry othcr law f.r ii " ;.i ["t^g ?" f.irce o"r in the terms ement' settlemerrl or

contract o[ servicc. ]

35. Saving.-Nothint be deemed to alfcct^thc ,'rro,r-i.ioni oi itre Coal M"l,t us Schemes Act' 1948 (46 of t948), or of^any scheme

36, Porver of exemption.-lf the a mment' having I"g'19 !:

,f.,., fi.rnniiot gositi(,n a;d other relevant circttnrstances of any establishment or :i;:;';;;iith;;,tts. is of opiuion that it will not be in public interest to aPPly Tha Pavmenl ol Bonus Act¹⁹⁶⁵lSec³²

class of estab , n

c

Public lgr . nii n. onu of thc provisions of th;t act rherclo, it 1ay' by notificatron rn the-,':'. ,:'. ',',! -,,-i,,,.r -c h.w la c 'o"'f'od therein and subiect ljiri.i"i aj"*,i",-"i"rnpi r..-tu.r' periorJ as mry be speirfred. t i '^.,,.h .^,r,1 ' ri.lnq ;rs il mav thinl fit to '*poi", trih

establishment or class of lo snch condtti<.rns a t y ,*ooi",

.rroblirh^.nt. from all or iny^of the provisions of this Act'

COMMENTS

(i) lt^the Governrncnt ha,l t'xcrcistd fowr:rs tmder scction 36 of thc Act '::-"

Ol:Il:::1fl:i

' '-l;;,;",;.''j;;i""ii,^ .'r,,"i,*a

irv the est'rtrlshrnerrt ' ";".'', . ' n i'::lllt'*jl:'l';i'ti:';i t:,,;;-'';'i"i",,J " l'".n "ppiliariotr t'rr thc snme '" "'' j :"""' i'i ' .t''?'qn/sd,'s'Iv

cl in sectror ir.r: {ri: l" 1* rirr'i a illr thlr firflnlhl

c, and thcir othcr circunrslnnccs havo to b('$({n

iate Covernrnert to fo(nr its oPinlon ulrdcr

SlnlealTanil NaLlu v K Sdl''hdvaSutr' AIR

lc96 5C 344.

(iir) For xranting exemPtion to any establishmenl, the Government has to Pas'\ r sPeakIIrB ll'il-tl""f,' tt '',,i o"*toionent Bari ,. Nalional Doiry

Dal''loptnenl Enploy&'s' Union (1986J 2 orde.; Nslionol DaDY DtucloP e l v. cv.lop mploy&'s'^ion t.LN^146.

he^td; Sl..le ol Tantl u K. Sobanayagam & f NS.H,8 . 0989) 1 l'l'N⁹⁵⁵

iiuioef,rr. acco.airlg exemPtion under section 36 to an c'stablishmur('

its emPloyces shorrld^bc

i, ttiti" f ro t Nair^vn T B ' (Mad)

i" Si,u..-itv e.i-zl "l 1976, scc 22, for section

3{ lw r'e1 25-9'1975)'

20

Sec.401

The Paymsn! ol Eonus Aci 1965

(v) The appropristc Governmcnt must considct relevant factors bcfore it chooscs to.lccord exemplion;_f N. Stat( Housfig Board v .K. Sabanalngnh, 0 990) 6l FL.R 60 (Sumnury) (Mad). 37. Power to remove difficulties.-[Rcp . by tht, parlueni of 'Bonus (Ampndmmt) ALt, 7976 (23 of 192 , set. 23 (u,r.e.f. 25.9 lg\il.l'

38. Power to make rules^-(l) The Central Government may make rules for the purpo.se of carrying into effect the provisions of this Act.

(2) In particular, and without prejudice to the generality of ihe foregoing power, such rules may providc for-

(a) the authority for granting permission under the proviso to sub_ cfarrse (iii) of clause (l) of section 2;

the preparalion of registers, records and other documents and the form and marner in which such registers, records and documents may be maintained under section 26;

the powers which may be exercised by an inspector under clause 1e; of sub-s€ction (2) of section 7;

(d) any other ma er which is to be, or may be, prescribed.

(3) Every rule made under this section shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days, which may be comprised in one session llor in two or more successive sessionsl, and if before the expiry of the session 2[immediately following the session or the successive sessions aforesaidl, both Houses agree in making any modification in the rule or both Houses agree that the rule ihould not be made, thc rule shall thereafter have elfect only rn such modilied form or be of no effect, as the case may be; so, however, that anv such modification or annulment shall be without preitrdice to the validity of anything previously done under that rule-

39. Application of certain laws not barred.-Save as otherwrse exDresslv provided, the provisiors oI this Act shall be in addition to and not in der6gation of. the Industrial Disputes Act, 1947 $a oI 947), or any corresponding law relating to investigation and settlement of industrial dispuies in force in a State. An exercise to identify a person a. *"ffa*:il"T,", enrued ro bonus under a covcrnmenl Resolutior wrs wilhin the iurisdiction of the l-abour Court urder scchon 33C(3) of the lndu-strial Dispules Act,7947) SlatL,ol Mahanshtrc v Qnadat Mohd Finjan,2U)2 (2) LLJ 1024 (Born)

40. Repeal and saving.-(l) The Payment of Bonus Ordinance, 1965 (3 of 1965), is hereby repealed.

.⁽²⁾ N_otwithstanding such repeal, anything done or any aciion taken under the said Ordinance shall be deemed to have been done or taken rrnder this Act as if this Act had commenced on the 29th May, 1955.

1

2

S bs by Act 23 d 1976, sec 24(a), for ,,o. in two sr.rccessivc scssions, (w.r-c.f 25-9-1975) Srbs. by Act 23 tt( 1976. scc 24(b), for ',in which it is so laid or the session immedint(,lv foUowing" (w.r,e.l 25-9 -1975).

(b)

(c)

I

21

24 Th6 Payment ol Bonus Act, 1965

ITTHE FIRST SCHEDULE

ls?e section 4 (a)I

COMPUTATION OF GROSS PROFITS

Accounting year endin g..,,,.,,,. Parliculars Amount of

sub-items

lsch.¹

ilfrlr :1:ir Amount of main itens Remarks Rs,

'1. Net Prcfit as shown in the Profit and t oss Account after making usual and necessary Prov$lons.

Add bdck ptovisio torl

(a) Bonus to emPloyees.

b) Depreciation.

(c) Development Rebate Res€rve

(d) Ary other reserves. To[al of ltem No. 2 Add bad< alscl-

(a) Bonus paid to employees in resPect of previous affounting years.

(b) The amount debited in resPect of gratuity paid or payable^to employees in excess of^the aggregate of-

Ser foot-note (l)

Rs. sde foot-note (l) Sce foot-note (1)

Scr foot-note (1)

(c)

(d)

(i) lhe amount, if any, Paid to, or provided for payment to, an lpproved tratuity fund;^and

(ii) the amount actually Paid^to employees on their retirement or on termination of their ernployment for any reason. Donations in excess of the amount admissible for income.tax. Capital expenditure (oth€t than capital exDenditure on scientific research which is allowed as a deduction under any law for^the time b€int in force relating ho dir€ct taxes) and capital losses (other than losses on sale of capital aisets on which depreqiation has beefl allowedfor income-lax).

(e) Any amount certified by the Reserve Bank of India in terms of suFsection⁽²⁾ of s€ction 34A of^the Where the prolit subject lo taratim is shown rn the Profit and l,oss Account and thc provision mlde for taxes on income b shown, the actual Provision for Laxcs on incohe shall be deducted from the profit.

l. lns. by Act 66 of 1980, sec. 19(b) (w.r.e.f 21-8-19E0) Earuer the First S.hedule was omitted by Act 23 of 7976, 6ec. 25 (w.t.e 1. E 9-1975),

-

22

The Payment of Bonus Act,¹⁹⁶⁵²⁵Scft 1l Item

No.

Particr^atsAmount ot

sub-itemg

Amount

of main

items

Remarks

t

I

Banking Retulation Act, 1949⁽¹⁰ of 7949r.

(0 Losses of, or exPenditure relating to. anv business situated outside lndia.

-

Total of Item No- 3 ....... Add dlso incor''e, profits or Sains (if any) cr€dited dircctli to Published^or discloded r€serves, other than-

(i) Pro-fits sate of

which

allowed

for income tax);

(ii) profits ol, and receiPts telatin8^to, anv business situated oubide [ndia;

(iii) income of forci8n banking companies from investment outside lndia-

Net tolal of ltem No. 4 -....-'-.^. Total of ltem Nos.^{1, 2"} 3 and 4. .'. ' Defu$t:

(a) Capital receiPts and caPital Pto-fits ' (other than Profits on the sale of assets on which dePleciation^has

been allowed for incometax).

Profits of, and recelPts relating^to,

anv business situated outside lndia.

lnio-. of forcign banking

companies from inve8tment6

outside lndia.

Expenditure or losses (if anY)

debited directly to Published^ot

disclosed teserves, othet than-

(i) capital exPenditure^and capital losses (oth€r than iosses on sale of caPital ass€ts on which dePr€ciation has^not been allowed for incometax);

(ii) tosses of any business sih.rated outside India.

(e) In the case of foreign banking companies ProPortionate admini+ trative (ovLrhLad) exPenses of Head Office aUocable to Indian Rs

lc\-

R5.5.

6.

(b) (c) (d)

I

1

Se? fooFnote (2) Ses foot-note (2) See foot-note (2) Ser foot-note (3) -

23

F

The Pdyment ol Bonu€ Acl, ,65 lsch. I Item

No.

ParticulatB Amount of

sub'iterns

Amount

of main

ilerns

Remarks

Refund of any exc€63 direct^tax paid for pfevious accourting years and excess provision, if any,^of previous accounting years, relating to bonut dep.eciation, or develoP' ment rebate, if written back, Cash subsidy, if any, given by the Goverun€nt or by any^body

corporate established bY anY law for the time being in forc€ or by any other agengf through budgetary grants, whether Siven direcrly or through any aBency for sPecified purposes and the Proceeds of which are reserved lor^such PurPoses.

Total of ltern No. 6....,.

7. Gross I'rofits for purposes of bonus (It€n No. 5 minus ltem No.

(0

G)

See foot-note (2) 5€d ioohnote (2) Rs.

Exphnqtion.-ln sub-item O) ol ltem 3, "approved Sratuity fund" has lhe^same meanin8 assigned to it in clausc⁽⁵⁾ of sedion 2 of the lncome-tax Act. Firot note6--

(I) 4 and to the extent, charyed to Profit and tn65 Accorht-

(2) lf, and to lhe extent, credited to Prcfit rnd [,oso Acaount,

(3) In the proportion of India-tr Gr6s Proflt (ltem^No. 7) to Total World Grosc Ptoftt^(as Fr Consotidaed Profit and toos Ac(ount ldiu6ted ac in Ilem No 2 above only) l '[THE SECOND SCHEDULEI

rtSac section 4(b)l

COMPUTATION OF GROSS PROFITS

Accounting Year eading."'.^. Irarticulars Amount of eub-iterns

Amoun!

of^main

Iterns

Remarks

Rs.

l. Net ftofit as per Profit and Loss Account,

2. Add back provision lor:

(a) Bonus to employees.

(b) i-ic;,r',,< :.rlrL'rr fn" Fiar S"f,"aU" --"u-leted at the Sccond Sch€dul€ by Acl 66 of 1980, s€c 19(') (w-r'e^f 23 0l 1976,

Earlier^the

the wotde

"(5?. scction 4)" (w,t.e.t. 8.9-1975r,

24

Sch.2l The Paymant ot Eonus Acl' 1965 Item

No.

Particulats Amount of

sut>ilems

Amount

of main

rtems

Remarks

Rs.

(c) Direct taxes, including^the provision (if any) for Prcvious accounting Years. r[(d) DeveloPmenl reba te / lnv€stmert allowance/DeveloPment allowance

reserve.]

(e) AnY other reserves. Total of ltem No. 2...^. Add brck alu::

(a) Bonus paid to employees in respect of previous accoundnt Yeals' ,[(aa) Thi amount debiled in resPect of gratuity' Paid or PaYable^to [mplofeo' in exc€ss of^the

aggregaae of-

(i) the amount, if any, Paid to, or emPloyment for anY reason l

(b) Donations in excess of the amount admissible for income't'ax'

(c) AnY affiuity due, ot commuted ' ' valie of anY annuitY Paid, under the Drovisions of section 2E0D of

the lncome'tax Act during^the

accountlnS year'

iture (other than

ture on scientific

is allowed as^a

r anY law for thc

tim€ beint

bxes) and

lossgs on

which^d

allowed tot income lax^or

aqricultural income tax).

I-iss€s of, or expendilure relating

to, any business situated outsid€

lndia-

Toral of ltem No. 3^.

S€c foot-note (l)

See footsnote (t )

Ssr fooFnotc (1)

Sce looFnote (1) (d)

(e)

l'*';'^f^f ?i,'#:f1,ti"li-';I:sl';i1,1"'"'21'8-re8o)

25

Tha Payn ont ol Eonus Act, 196g

lsch.2 Iiem

No.

Parliculars

Ahounr of Amount -_- i;;*; " sub.items of main R,i

4. Al.d also itrc!/i\e, pmfils or gains (if any) credjted directly to rCserves, ollrcr than-

(i) capital receipts and capihl. profits (including prolits on the' ;le of capital ass€ts on which depreciation has not been allowed

for incomc-tax or agricultural

Income-tax)j

(ii)

(iii)

Net total of ltem No. 4...

Total of ltem Nos. t, 2. 3 and 4...

Deduca:

(a) Capital rec€ipts and capital profits (other than profits on'the sale of assets on which depreciation has been allowed for income_lax or agricuhural income-tax).

(b) Profits of, and receipls relating ro, any business sihrated outside India.

(c) lncome oI loreign concerns from investmen!s outside lndia_

(d) lr.pm{iture or tosses (if any) debited directly to reserves, ottsr thon-

(i) ca pi ta l. cxp€nd i t u re and capital losses (other than lo6se6 on sale of Capital assets on whrch depreciation has not oeen

allowed lor incorne.tax or

agricultural rncome.lax;

(ii) loss€s of any business situatcd outside Indra.

(e) In the ca6e of foreign concern5 prioportionaie administrative (over. head) expenses ol Head Office allocable to Indian business.

(f) Refund oI any direct tax paid tor prevtous acrounting years and qrcetlr Pto!lljiDn, il {n}, oI prcviotr$ ikco{rnling vrlis rclabng tf' bonuti, di,ffcct"rtrrrn/ taritti(Jn ot dsvsh)r! T:nl rel'alr or devclo1,m,rn1 S€e foot-nore (2)

Sde foot.note (2)

S€€ foot-note (2)

Ser foot-note (3)

See loocnote (2)

tll)rt,rn{r:, if rr'tiltr.n bach,

26

."--*** Sch.3l The Payment ot Bonus Acl, 1965 ^ZY Item

No,

Parliculars Amount of Amount sub-iterns of hain

llems

llemarks

t[(g) Cash subsidy, if any, given by the Governmcnt or by any body

corporate established by any law for the time beint in force or by any other agency through budgetary granls, wheth€r given directly or through any agency for specified purposes and the proc€eds of which are reserved for such

purposes.l

Total of Item No. 6...

7, Gross Profit for purposes of bonus (ltem No, 5 minus ltem No. 6)

Rs.

{IHE THrnD SCHEDULEI

[See sectron 6(d)l

I

Rs. --====:= Rs.

zlExplanalion.Jn sutsitem (aa) ol llem 3, "aPProved gratuity fund" has the samc meanin8 assigned to ir in clause (5) of section 2 of the U"_9Ia!.1I-"4S|L***"."- Foot-notes.-

(l) lf, and k, thc ertenl, chatgcd to Ptofit and Los$ Aocount

(2) lf, and to lhe extent, crediH 1o Profit and l,ocr A.count.

(3) In thc proportion of Indian Gross Pmfit (ltcm No. 7) 1o Tolal World Gnrs.s Profit (as Per Consolidoled Profit and Loss Account, adiuslcd os in llcm No 2 above only) (r)I alcompany, other than

banking companyl

The dividends Payable on ilq

Drejer€nce share capital for^the

iccounting year calculated at^the

actual rate at which such

dividends a!e payablei

8"5 per cent (/f its paid uP equity

share caDital as at^the

commencement of the accounting

year;

6 p€r cent of its reserves shown in

its balance-sheet as at^the

commencement of the accounting

(n)

0ii)

1

2.

Sub$- by Act 23 of 1976, sec. 26(d), for sub-itcm (g) (\! r.e1 25-9-1975)' Ins by Act

The Socontl Act 66 of 1980, sec. 20 (w r'o t

2l-8-1980).^" wns subslituted by Act 23 of

1976, sc..z @ tef' 25-9-1975)

Subs. t'y Act 66 oJ 1980, $:c.20{.), for "CQmPnny" (w r'"'.I 21'&1980) Earlier the wonls ", othc'r tlrian a l,anling cornpany" we.e omitted Ly Act 23 of 1976, sec 27(b) (w r'e f 25-9-1975)

27

30

fhe Pawant ot Bonus Ad, 1965

ls€h,3 {li

yeat including any prolits carried forward from the Dlevious accoun ng year:

'[2. Banking company

di.,.d lhdi^r{. h.crr thr,. empl(tvcr ji, d ,mpnr}f !"il.hiF lh{ meatling rri | ,lt th!' (i)mF,uri,'\ A.t, l,r\, il .,1 19,i61, th(' ttrtdi nmounl h: lrrr dqrlrrclad trnder thi:; ttpm,th.rll be l|^q t*. crrnt on fhe ngdregntd rll the v;!lur. ol the nr+ firort a.sErs dnd lhe {ltraent a*1r't\ tt lh{' cornpnn! irr hdrr aftr-r dr.dufhng rhc ,rrnorrni ,,i rr, !"une.tt liirfriltlies {irther thrn rn!' dn]r}unt Fd.l.n Cl)mF,!n! t(1^ttt

cg ivh tils "ralv ,rdr"rrl(r

{he ll {rr otnerl\t:{,.t

any interest pajd by the company to irs Head Of6ce) in lndia.

(i) The dividends payable on its preference share capital for the accounting year calculated at the raie at which such dividends are pnyable;

(ii) 7.5 Fr cent. of its paid up equiry share capital as at lhe commence. rnent of the accounting year;

(iii) 5 per cent. of its res€rves shown in its balance-sheet as at the com- mencement of the actounting year, including any profits carried forward from the previous acc- ountrng year;

(iv) any sum which, in respect of the accounting year, is transferred by It-

(a) to a reserve fund under sub- s€ction⁽¹⁾ of sectjon 17 of the Banking Regulation Act, 1949 (10 oI 1949L or

(b) to any reservG.s in India in pursuance of any direction or advice given by the Reserve Bank of India,

whichever is higher:

Proeided that where the banking company is a foreign company within the meanin8 of section 591 oI the Companies Act, 1956 (1 of 1955), the amount to be I lns. by Act^('6 of 1980, sec. 20(b) (w-r,e.f 21-8-1980), E6rlie! irern 2 was om ied by Act 23 oI 7976, Eec. 27(c) (w.r.e f 219.79751.

The Paqnent ol Bonu6 Act,^{1965 31}Sch 3)

3. CorPoration

4. Co-oPerativesocietv deducted under this ltem shall be^the the^same

re(erence

wolking

rLs total

world working funds;

29

F!;G?

32

The PaynAnl ol Bonu6 Acl, t 5 i:l:

5

Any other employer not falling under any o( the aforesaid c6tegoItcs.

operative societies for the time beint in force.

E.5 per cent. of th€ capital inv€sted by him in his establishment as evidenced from his books of accounts at lhe commencement of the accounting yea!:

Fmlrded llr;rt *'hqr*.quch t'nrplovcr i.r ;r F4.r|nrn r0 {ahom t:h}pl{'r XXIIA tri the Incomc-lal Act opFlir{s- tlrc aFnu;t} tlep$rii p+1,"rtrlr bv hinl urtrlrr th prrlvi\itnrs af lb.1t (luprtr5 ;1x;;rt* lh(: ar.!]rrntlng yrir slull illS{j L}lj d0tlrk:lirJl

lltr:r{drd iurthrrr lhilt wlvr'l .||th ,: n il rrn{)un{ {'(lu'rl ld J-1

ul thu .rr:riiLr rlt"rived frv rt

est bl t il1 rr*lL|ct Llf tilr

lvhrr,^thr l!.lllncl\lltl',) nt, !i hclhet rrr.tl.rr r\'rlllCn, Frnr idr* F,rtfilrnl ui f,cmuneralitrn lo dnl'srrch pilrtn€r, ,rnd* iirl^lhF Intll r{r!!u|1!rrlrin tlirl bl\r^lr! ,rll ,'uch F.rrinqF r:. hiFh{! lh^n l,rc s;trrl ?5 ;.t'r (*nt. itt{h pi:rupntngi:-

rrr a rttnt r,rlr.rLl,rlrt{ nt lh('1il[i^o! ''t$Aht I tl-'

!ll(:tr F t rlt

rh{ll hi" thir

provjso:

Provided also that where such employer is an individual or a Hindu undividecl famrly-

trl^l

tr

l:

.il{lrr J{'ductlnri ilc|n {'rirtilr1 ir'l trcitrdirde* u ilh lhe lfr.lv|9!{rfis ,rf cldr(|ii. ld) {r{ at{lir'ln ir: or

(ii) forty-€ight thousand rupeet whichever is less, by wdy of remuneralion to such emDlover, shall ilso be deducted.

Tha PaYment ot Bonus AcL 1965 Any emploYer falling under Item No. I or ltem No l or ltem No,4 or ltem No 5 and being^a licerLsee within the m€aning of the Electricity (SuPPlv) Act, 1948 (54 of 194E)

Explaflntion.--Ttre exPression rcserves" occttrring il tt-llu.")l- lll aSainst ltem Nos

'rur,ii,ii,Lii".a 3(ii)r sh'an not

inctri*il;:n::;,Hljlll i:i*1,il:!l'"*?t,, o" (r) p.lyment of any direct ta

(,,)

P"iIXbl; r"y d"Preciation admissible in accordance with the provisions of clause

(a) of section 6i tiiil i'ly^u"iof dividends whiclr have been declared' t,"t tttilliitXd,f."nt'

over^and above the amount referred to in clause (i) of^this ElPlntntion' set aParl^as 'p"tiiit '""ttu"

for purpose of Payment of^any direcl

rul l1l ""f.'", set aPart for me€ting anv dePrec';'119i-'-',:l::*^{or the} amount

'" ;;"^;;ibt" i"

"..o'tdontu *ittt th""p'otisiots^ttf clause (a)^of section^6'

,[THE FOURTH SCHEDULE

(S(f section

9ta

the

oft

33

(3)

(1)

6

(2)

i!ii'' att o'.tt t "q,,"t

Amount Payableas bonus Stlt on or set

off of the Year

ctrried forward

Total set on

or set off

C-atlicd forwardto sixty Pel cent- or sixty-

seven Per cenl

irs the case may^be,

or available surPlus allocable as bonus i,'; i4l

1

2

.:l Rs.

1,04,167

5,35,0fi)

2,20,000

Rs

'r,04,167"

2,s0,000- 2,50,000{ (in(lusive of 30,000 from yeat'2)

Rs.

Nil

Set on

2,50.000'

Nil

li.^{nl ,} 1,.rr.l Nil

Set on

2,50,000-¹²⁾ S)t^on

2,20,ffi⁽²⁾ ;;.^rrl 19E0, soc 20t.i' l''r' l(^t 'i^:

Earlicl the words

31

fltc W ot &fln Aq tc66 2J0,m0"

(iEhEivr ot t,lorm &om yeen2)

e50,m0.

2,9,w

(irdndv" of 15n00 ftom )'€15{ .nd

25"00 freur Fr{) tptl6P

lncludvc of illl,Om

N

3,10/0q) 1,(xrx00

MI

(du. to lor.) t0p@

2,1ttfr

Set ql

r25,ql0

Nit

Set on

oru

9!t otr

69,t67

Sei off

9+167

from ycrn6) ' \w$r

Set on

2,mN

r,8M

$et or

t,t0&

rfi/Ip

Set dr

Nil+

1,Em

@,w

Sat ol

30rq)

(2)

(4)

e)

(.)

e,

(o

(6)

(6)

(E)

(e) (e) SGt off @,16, (8) (rftrr rcttilg o,fi 69,167 hom y.it-.E E* off

e,167

*167

Set off

52501

|nd 41,666 tlom NoE F

' Mrxit^|n

+ Ihc batrnce of Rr, l,l0pO rct on ftoo yrrr"2 teprea o ldDiD||!!]

32