Dear Mr.Venky
The applicability of the Paymen of Bonus Act to software/IT companies has to be determined based on the provisions of section 1(3)(a) and 1(3)(b) of the Payment of Bonus Act. According to section 1(3)(b) the Payment of Bonus Act is applicable to an establishment in which twenty or more persons are employed on any day during an accounting year. You appear to be based in Chennai. Therefore I am answering your post with reference to the provisions applicable to software/IT companies in Tamilnadu. The software/IT companies are covered by the provisions of the Tamilnadu Shops and Establishments Act. They are considered to be "establishments" as defined under the Tamilnadu Shops and Establishments Act. Therefore according to section 1(3)(b) of the Payment of Bonus Act if the software/IT companies employ twenty or more persons in an accounting year, then the Payment of Bonus Act is applicable to them. May be that the employees are higher than the upper limit fixed by the Act. In such a case those employees are not covered by the provisions of the Act. But the Act is applicable to the establishment. Therefore if any one comes within the salary limit then the Company is bound to pay them bonus as provided for by the Act.
The applicability of the Paymen of Bonus Act to software/IT companies has to be determined based on the provisions of section 1(3)(a) and 1(3)(b) of the Payment of Bonus Act. According to section 1(3)(b) the Payment of Bonus Act is applicable to an establishment in which twenty or more persons are employed on any day during an accounting year. You appear to be based in Chennai. Therefore I am answering your post with reference to the provisions applicable to software/IT companies in Tamilnadu. The software/IT companies are covered by the provisions of the Tamilnadu Shops and Establishments Act. They are considered to be "establishments" as defined under the Tamilnadu Shops and Establishments Act. Therefore according to section 1(3)(b) of the Payment of Bonus Act if the software/IT companies employ twenty or more persons in an accounting year, then the Payment of Bonus Act is applicable to them. May be that the employees are higher than the upper limit fixed by the Act. In such a case those employees are not covered by the provisions of the Act. But the Act is applicable to the establishment. Therefore if any one comes within the salary limit then the Company is bound to pay them bonus as provided for by the Act.