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    Payment of Bonus Act, 1965 & The Rules: Checklist

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    paravind
    The document outlines key provisions of the Payment of Bonus Act 1965 and Rules in India, including: 1) The Act applies to factories employing 10 or more persons with power and 20 or more without power, and outlines how to compute available surplus, eligibility of employees, and time limits for bonus payment. 2) Eligible employees are those drawing wages up to Rs. 3500 per month, with a maximum of Rs. 2500 considered for calculation. Minimum bonus is 8.33% of salary or Rs. 100. 3) Bonus can be deducted if an employee is dismissed for fraud, violence, theft, misconduct causing financial loss, or disqualification and deductions are outlined in Sections 9 and 18

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    Payment of Bonus Act, 1965 & The Rules: Checklist

    Uploaded by

    paravind
    206 views2 pages
    The document outlines key provisions of the Payment of Bonus Act 1965 and Rules in India, including: 1) The Act applies to factories employing 10 or more persons with power and 20 or more without power, and outlines how to compute available surplus, eligibility of employees, and time limits for bonus payment. 2) Eligible employees are those drawing wages up to Rs. 3500 per month, with a maximum of Rs. 2500 considered for calculation. Minimum bonus is 8.33% of salary or Rs. 100. 3) Bonus can be deducted if an employee is dismissed for fraud, violence, theft, misconduct causing financial loss, or disqualification and deductions are outlined in Sections 9 and 18

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    Payment of Bonus Act

    Original Title

    Payment of Bonus Act

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    The document outlines key provisions of the Payment of Bonus Act 1965 and Rules in India, including: 1) The Act applies to factories employing 10 or more persons with power and 20 or more without power, and outlines how to compute available surplus, eligibility of employees, and time limits for bonus payment. 2) Eligible employees are those drawing wages up to Rs. 3500 per month, with a maximum of Rs. 2500 considered for calculation. Minimum bonus is 8.33% of salary or Rs. 100. 3) Bonus can be deducted if an employee is dismissed for fraud, violence, theft, misconduct causing financial loss, or disqualification and deductions are outlined in Sections 9 and 18

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    206 views2 pages

    Payment of Bonus Act, 1965 & The Rules: Checklist

    Uploaded by

    paravind
    The document outlines key provisions of the Payment of Bonus Act 1965 and Rules in India, including: 1) The Act applies to factories employing 10 or more persons with power and 20 or more without power, and outlines how to compute available surplus, eligibility of employees, and time limits for bonus payment. 2) Eligible employees are those drawing wages up to Rs. 3500 per month, with a maximum of Rs. 2500 considered for calculation. Minimum bonus is 8.33% of salary or Rs. 100. 3) Bonus can be deducted if an employee is dismissed for fraud, violence, theft, misconduct causing financial loss, or disqualification and deductions are outlined in Sections 9 and 18

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    © All Rights Reserved
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    PAYMENT OF BONUS ACT, 1965 &

    THE RULES

    CHECKLIST

    Applicability of Act
    Every factory where in 10 or more persons are
    employed with the aid of power or
    An establishment in which 20 or more persons are
    employed without the aid of power on any day during
    an accounting year
    Computation of available surplus
    Income tax and direct taxes as
    payable.
    Depreciation as per section 32 of
    Income Tax Act.
    Development rebate, investment or
    development allowance.
    Sec.5

    Components of
    Bonus
    Salary or wages
    includes dearness
    allowance but no other
    allowances e.g. overtime, house rent,
    incentive or

    Disqualification & Deduction of Bonus


    On dismissal of an employee for
    Fraud; or
    riotous or violent behaviour while on the premises of the
    establishment; or
    theft, misappropriation or sabotage of any property of the
    establishment or
    Misconduct of causing financial loss to the Employer to the
    extent that bonus can be deducted for that year.
    Secs. 9 & 18.
    Eligibility of Bonus
    An employee will be entitled
    only when he has worked
    for 30 working days in that
    year.
    Sec. 8
    Time Limit for
    Payment of Bonus
    Within 8 months from the
    close of accounting y ear.
    Sec. 19

    Payment of Minimum Bonus


    8.33% of the salary or
    Rs.100 (on completion of 5
    years after 1st Accounting year
    even if there is no profit)
    Sec.10
    Sec. 8
    Set-off and
    Set-on
    As per Schedule IV.
    Sec. 15

    Maintenance of Registers and Records etc.

    Establishment
    Establishment includes
    Departments,
    undertakings and
    branches, etc.
    Separate establishment
    If profit and loss accounts
    are
    prepared
    and
    maintained in respect of
    any such department or
    undertaking or branch,
    then such department or
    undertaking or branch is
    treated as a separate
    establishment.
    Sec.3
    Computation of gross
    profit
    For banking company,
    as per First Schedule.
    Others, as per
    Second Schedule
    Sec.4
    Eligible Employees
    Employees drawing wages
    upto Rs.3500 per month
    or less.
    For
    calculation
    purposes Rs.2500
    per
    month
    maximum will be
    taken even if an
    employee
    is
    drawing
    upto
    Rs.3500
    per
    month.
    Sec.12
    Note: The proposal to
    enhance the existing

    A register showing the computation of the allocable surplus referred to in clause (4) of section 2,
    in form A.
    A register showing the set-on and set-off of the allocable surplus, under section 15, in form B
    A register showing the details of the amount of bonus due to each of the employees, the
    deductions under section 17 and 18 and the amount actually disbursed, in form C.
    Act not applicable to certain employees of LIC, General Insurance, Dock Yards, Red Cross, Universities
    & Educational Institutions, Chambers of Commerce, Social Welfare Institutions, Building Contractors,
    etc. etc. Sec.32.

    PENALTY

    For contravention of any provision of the Act or the


    Rule

    Upto 6 months or with fine upto Rs.1000.


    Sec.28

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