In my view the act does not talk of diwali or festival bonus. It only says that if some festival bonus is paid, then such amount is allowed to be adjusted against the bonus payable as per the Payment of Bonus Act. Bonus is payable only if the salary is less than Rs 2500 per month. May be this was raised to Rs 3500 per month recently --- i am not sure. In other words, the organisations do not have any legal liability to pay bonus to highly paid employees. If they pay, it is only an ex gratia and not bonus under the payment of bonus act.