Query on Section 16 of the Bonus Act
I have a doubt regarding Section 16 of the Bonus Act, which states that newly set-up companies may be exempt from bonus payment. My query is: XYZ Pvt. Ltd was incorporated in FY 2014-15 and incurred a loss; hence, the company is not liable to pay a bonus for this year. However, in FY 2015-16, it made a profit of 1,767,389/-. Please let me know whether the company is liable to pay a bonus for FY 2015-16 or not.
Clarification on Exemption Rules
Also, clarify the rule of exemption up to five years for newly set-up companies. Is this exemption available only in the case of a loss or also in the case of inadequate profit? If so, is there any ceiling limit of profit in Section 16, such that if the profit exceeds this limit, the company has to pay a bonus irrespective of the five years.
Regards,
Ashish Jain
I have a doubt regarding Section 16 of the Bonus Act, which states that newly set-up companies may be exempt from bonus payment. My query is: XYZ Pvt. Ltd was incorporated in FY 2014-15 and incurred a loss; hence, the company is not liable to pay a bonus for this year. However, in FY 2015-16, it made a profit of 1,767,389/-. Please let me know whether the company is liable to pay a bonus for FY 2015-16 or not.
Clarification on Exemption Rules
Also, clarify the rule of exemption up to five years for newly set-up companies. Is this exemption available only in the case of a loss or also in the case of inadequate profit? If so, is there any ceiling limit of profit in Section 16, such that if the profit exceeds this limit, the company has to pay a bonus irrespective of the five years.
Regards,
Ashish Jain