Bonus Eligibility Confusion: Does Including Allowances Affect the 21k Threshold?

Understanding the Eligibility for Bonus Under The Payment of Bonus Act

Under Section 21 of The Payment of Bonus Act, the definition of wages includes Basic DA and all other payments in cash. In the same section, 21(i) states that it does not include all other allowances received at that time.

My question is, if an employee whose monthly Basic + DA is under 21k but including all other allowances is more than 22k, will they be eligible for a bonus under the act or not?

Definition of wages under Section 2(21)

The definition of wages under Section 2(21) (not Section 21) states that wages mean all remuneration capable of being expressed in terms of money, including dearness allowance. The definition excludes contributions like PF, travel concessions, allowances such as the value of accommodation and other amenities provided, commission, etc., and any other allowance to which the employee is entitled at that time. This is part of the salary but is not as per the contract of employment.

For example, an employee has been asked to take charge of a branch temporarily and is allowed a deputation allowance. This is part of the salary but will be withdrawn when he is asked to return to the original post. Such allowances are those mentioned under 2(21)(i) of the Payment of Bonus Act. Therefore, if the gross salary excluding the temporary allowances is more than Rs 21,000, then the employee will be out of the Bonus purview.