Dear Team members, I have a question related to the Payment of Bonus Act. If the start date of the company is 11th March 2016 (IT Service provider), then the company will complete 5 years on 11th March 2021. Does the company need to pay a bonus for the broken period of March 2021 on a prorate basis, that is from 12th March 2021 to 31st March 2021, on or before November 2021? Or does the company need not pay any bonus for 2021 and start paying bonus from the year 2022 onwards? Your guidance in this query will be really helpful.
Thanks.
From India, Mumbai
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Thanks.
From India, Mumbai
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Understanding Bonus Payment Obligations
Don't be under the impression that there is immunity from payment of bonus for the first five years. As per Section 16(1A), even with respect to the first five years, a bonus as per the Payment of Bonus Act 1965 is payable for those accounting years in which there is a profit.
Eligibility for Part-Year Bonus
As to the eligibility for the part year, the Act does not lay down any criteria of minimum service post infancy period. That means a proportionate bonus is payable. If the overall allocable surplus is negligible, you can carry it forward to the next year (set on) in your records.
From India, Mumbai
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1593Don't be under the impression that there is immunity from payment of bonus for the first five years. As per Section 16(1A), even with respect to the first five years, a bonus as per the Payment of Bonus Act 1965 is payable for those accounting years in which there is a profit.
Eligibility for Part-Year Bonus
As to the eligibility for the part year, the Act does not lay down any criteria of minimum service post infancy period. That means a proportionate bonus is payable. If the overall allocable surplus is negligible, you can carry it forward to the next year (set on) in your records.
From India, Mumbai
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