THE PAYMENT OF BONUS ACT, 1965

THE PAYMENT OF BONUS ACT, 1965

 

  APPLICABILITY-:  

1) Every factory which 20 or mere persons (Less than 20 but 10 more than if appropriate Govt.notifies) are employed on any day subject to certain exemptions.

2) Bonus to be paid within eight months from the expiry of the accounting years.

ELIGIBILITY-: 

 

1) Every person (other than an apprentice) drawing salary up to Rs-21000/- PM.

2) Employees drawing salary up to 21000/- PM and those who have worked for minimum period of 30 days in a year eligible to receive bonus under the act (Salary limit enhanced from the Rs-10000/- To Rs-21000/-) 

3)  Every person drawing salary or wages exceeding Rs-7000/- or minimum wages for scheduled employment as fixed by Govt. whichever is higher per mensem the bonus payable to him to be calculated as if his salary of rwage where Rs-7000 or minimum wages fixed by the Govt. for scheduled mployment whichever is higher per mensem.

 COMPONENT OF BONUS -:   

Salary or wages included dearness allowances but no other allowances e.g. overtime,house rent,incentive or commision.

BENEFITS-: 

1) Subject to other provision :- Minimum bonus shall be 8.33 % of salary/wages earned or Rs-100 whichever is higher.

2) If allocable surplus exceeds the amount of minimum bonus, then bonus shall be payable at higher rate subject to a maximum 20% of salary/wages.

3) Computation of bonus is to be worked out as per scheduled 1 and 4 of the act.

4) payment of bonus act in Maharashtra to be paid by cheque  or by crediting same in the bank account of an employee. 

 

METHOD OF BONUS CALCULATION-:

1) Calculation Gross Profit in the manner specified in-:

       a. First Scheduled in case of banking company or

       b. Second scheduled in any other case.

2) Calculated the available surplus -:

Available surplus=A+B,Where 

A= Gross profit (-) Depreciation admissible u/s 32 of the Income Tax Act, (-) Development Rebate or investment allowances or development allowances (-) direct taxes payable for the accounting year (calculated as per sec.7) (-) Sums specified in the third scheduled. 

B= Direct Taxes (calculates as oer sec.7)in respect of gross profit for the immediately preceding account year (-) Direct tax in respect of such gross profit as reduced by the amount of Bonus for the Immediately preceding accounting year. 

3) Calculate the Allocable Surplus-:

Allocable Surplus =60% of Available Surplus for banking industry & (67% in case of other than banking industry).

4) Make adjustment for Set on and Set off-:

For calculating the amount of bonus in respect of an Accounting year Allocable surplus is computed after considering the amount of Set Off from the previous year as illustrated in the fourth scheduled.

5) The Allocable surplus so computed is disturbed amongst the employees in proportion to salary or wages.

 

PENAL PROVISIONS-: 

 Imprisonment up to 6 months and or fine up to Rs-1000/- or with both