|The Payment of Bonus Act, 1965||the-payment-of-bonus-act-1965|
|The Payment of Bonus Rules||The Payment of Bonus Rules|
|The Payment of Bonus Act- Amendment||Amendment|
|The payment of Bonus Act provides for payment of bonus to persons employed in certain establishments of the basis of profits or on the basis of production or productivity and for matters connected therewith.
It extends to the whole of India and is applicable to every factory and to every other establishment where 20 or more workmen are employed on any day during an accounting year
|Eligibility For Bonus|
|Every employee receiving salary or wages upto RS. 3,500 p.m. and engaged in any kind of work whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting year if he has worked for at least 30 working days in that year.
However employees of L.I.C., Universities and Educational institutions, Hospitals, Chamber of Commerce, R.B.I., IFCI, U.T.I. Social Welfare institutions are not entitled to bonus under this Act.
DISQUALIFICATION FOR BONUS
Notwithstanding anything contained in the act, an employee shall be disqualified from receiving bonus, if he is dismissed from service for fraud or riotous or violent behaviour while in the premises of the establishment or theft, misappropriation or sabotage of any property of the establishment.
|Minimum/Maximum Bonus Payable|
whichever is higher
If in an accounting year, the allocable surplus, calculated after taking into account the amount ‘set on’ or the amount ‘set of’ exceeds the minimum bonus, the employer should pay bonus in proportion to the salary or wages earned by the employee in that accounting year subject to a maximum of 20% of such salary or wages.
TIME LIMIT FOR PAYMENT
The bonus should be paid in cash within 8 months from the close of the accounting year or within one month from the date of enforcement of the award or coming into operation of a settlement following an industrial dispute regarding payment of bonus.
However if there is sufficient cause extension may be applied for.
|Calculation of Bonus|
|The method for calculation of annual bouns is as follow:
Available Surplus = A+B, where A = Gross Profit – Depreciation admissible u/s 32 of the Income tax Act – Development allowance – Direct taxes payable for the accounting year (calculated as per Sec.7) – Sums specified in the Third Schedule.
B = Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately preceding accounting year – Direct Taxes in respect of such gross profits as reduced by the amount of bonus, for the immediately preceding accounting year.
Allocable Surplus = 60% of Available Surplus, 67% in case of foreign companies.
In case of an employee receiving salary or wages above Rs. 2,500 the bonus payable is to be calculated as if the salary or wages were Rs. 2,500 p.m. only.
|Duties/Rights of Employer|
An employer has the following rights:
|Rights of Employees|
|Recovery of Bonus Due|
|Offences and Penalties|
|For contravention of the provisions of the Act or rules the penalty is imprisonment upto 6 months, or fine up to Rs.1000, or both.
For failure to comply with the directions or requisitions made the penalty is imprisonment upto 6 months, or fine up to Rs.1000, or both.
In case of offences by companies, firms, body corporate or association of individuals, its director, partner or a principal officer responsible for the conduct of its business, as the case may be, shall be deemed to be guilty of that offence and punished accordingly, unless the person concerned proves that the offence was committed without his knowledge or that he exercised all due diligence