Whether Bonus is payable only as per ceiling or any other provision that an organisation making profit shall declare bonus despite the coverage.
BONUS IS A DEFERRED SALARY AND GRATUITY A REWARD FOR GOOD SERVICE AS PER THE SAYING. Then why it is restricted. ESI Act Ceiling, Bonus Act ceiling, Gratuity Act Ceiling used to be revised at a time or one after another as they are the benefits to be implied on enhancement of salary. Despite raise in salaries,Gratuity ceiling,Esi coverage purview Bonus kept where it is? What is the way any scope or provisions unaware as many industries pay exgratia in lieu of Bonus despite ceiling

From India, Bidar
umakanthan53
5026
Labour law & HR consultant

Dear Nazir,

Originally, the concept and payment of bonus got its genesis from the abnormal profits earned by the industries during the World Wars while the wage levels were constant at the minimum. Eventually the practice became permanent and bonus came to be treated as deferred wages even in the absence of profits. The cumbersome process involved in the calculation of profit and the application of tax laws to the revenues of companies coupled with the sense of equity ensuring a share in the profits to the employees demanded the passing of a special law exclusively for the purpose. As you are aware, any law relating to pecuniary matters would essentially be of regulatory in nature in view of the practical difficulties such as financial calculations, performance ratios , pecuniary advantages in the earnings, uniformity of application etc. Hence the restrictions relating to applicability, provision for periodical earmarking of bonus and it's range of rates.

Now, coming direct to your queries, paying bonus within the limits would not be added to the employer's tax liability. Just like space defined by occupancy and freedom by reasonable restrictions, fringe benefits having a statutory flavour should also have limitations subject to revision necessitated by circumstances. If you have the time and patience to thoroughly go through the amendments carried out in the Payment of Bonus Act,1965 so far, you will find the more convincing answers to your questions thus raised and remain hidden as well.

From India, Salem
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2021 Cite.Co™