Advocatesourabh
Manager Human Resources
Malikjs
Gm (hr)
Kvjraghunath
Hr Manager
+1 Other

Thread Started by #ra7881

Dear All,
Our's is a company that was formed 1.5 years back. We have 30 employees from the company formation date. Is it mandatory to pay BONUS now especially when the company is still in its inception stage. Please advise.
Thanks,
Ravi
17th October 2011 From India, Madras
Dear ravi your company is in infancy period .if you are getting porofits during infancy period than only you are required to pay bonus otherwise not.
17th October 2011 From India, Delhi
Dear Sir,
Appreciate your quick response. Thank you.
I'd like to know if the ACT says that it is not mandatory to pay Bonus if the company has not completed 5 years from the date of formation. Is that right? Please guide.
Thanks,
Ravi
17th October 2011 From India, Madras
Special Provisions with respect to certain newly set up establishments:

In the case of newly set up establishments following provisions have been made under Section 16 for the payment of bonus:

1. Where an establishment is newly set up whether before or after commencement of this Act, the employees of such establishment shall be entitled to be paid bonus under this Act in accordance with the provisions of sub-sections (1-A), (1-B) and (1-C).

(1-A) In the first five accounting years following the accounting year in which the employer sells the goods produced or manufactured by him or renders services as the case may be, from such establishment, bonus shall be payable only in respect of the accounting year in which the employer derives profit from such establishment and such bonus shall be calculated in accordance with the provisions of this Act in relation to that year, but without applying the provisions of Section 15.

(1-B) For the sixth and seventh accounting year in which the employer sells the goods produced or manufactured by him or renders services as the case may be, from such establishment.

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17th October 2011 From India, Vijayawada
As per payment of Bonus Act I newly formed company is exempted from paying bonus to its employees for first five years. But if the company in these five years generate profits then it is liability of the company to pay bonus (Minimum 8.33%)to its employees.
17th October 2011 From India, Chandigarh
Consider the following scenario:
A company in its 2nd year with 50 employees.
Profit is Rs. 50000.
8.33% of wages = Rs 100000
Then will the company distribute the Rs 50000 as a bonus? If yes, then the bonus is less than 8.33%(minimum)? What happens in this scenario?
15th January 2019 From India
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