Thanks for your advice. What is the consequence to the company if we used to pay 20.8% or equivalent to 2.5 month salaries. Would there be any penalties for the past years? Where can I check the tax rates of exgratia and the legal consequence of paying bonus >20%.
28th March 2009 From Hong Kong, Kowloon
If you have paid bonus which is more than the maximum % i.e. 20% then the extra amount paid will be considered as ex-gratia amount. This will be taxable.
You may take advise from your C A or tax consultant in this behalf.
Skylark associates, Gurgaon
5th April 2009 From India, Delhi