Can Employer Pay Bonus to Employee in Two Parts like 50% as a Bonus & 50% in PF Account???
From India, Vadodara
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6From India, Vadodara
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PF & Bonus Compliance
PF and Bonus are statutory. You need to contribute towards PF in accordance with the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, and you need to make payment of the minimum statutory bonus in accordance with the Payment of Bonus Act.
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From India, Aizawl
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PF and Bonus are statutory. You need to contribute towards PF in accordance with the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, and you need to make payment of the minimum statutory bonus in accordance with the Payment of Bonus Act.
Thank you.
From India, Aizawl
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Thank you for Reply but still i have one confusion.... We paid as an employer minimum amount as a bonus and rather than that amount can we pay bonus amount in PF account????
From India, Vadodara
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From India, Vadodara
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Bonus Payment and Provident Fund Contributions
You can pay up to 20% as a bonus payment depending on the company's profit (or more, but the terminology used is "ex-gratia" instead of bonus). However, the statutory minimum bonus is 8.33%.
Provident Fund Contributions
In Provident Fund, contributions are deposited based on the wages/salary earned by the employee. According to the Income Tax Act, the bonus is considered part of the employee's salary and is taxable.
"As per the provisions of the Income Tax Act, 1961, the amount of compensation due or received by an employee from their employer in connection with employment shall be taxable as salary in the hands of the employee. Accordingly, the bonus receivable by you shall be taxable in your hands as salary income."
Contributions towards PF are based on the monthly wages/salaries of employees. Employers cannot increase contributions towards PF for just one month.
From India, Aizawl
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You can pay up to 20% as a bonus payment depending on the company's profit (or more, but the terminology used is "ex-gratia" instead of bonus). However, the statutory minimum bonus is 8.33%.
Provident Fund Contributions
In Provident Fund, contributions are deposited based on the wages/salary earned by the employee. According to the Income Tax Act, the bonus is considered part of the employee's salary and is taxable.
"As per the provisions of the Income Tax Act, 1961, the amount of compensation due or received by an employee from their employer in connection with employment shall be taxable as salary in the hands of the employee. Accordingly, the bonus receivable by you shall be taxable in your hands as salary income."
Contributions towards PF are based on the monthly wages/salaries of employees. Employers cannot increase contributions towards PF for just one month.
From India, Aizawl
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EPFO circular regarding TDS on Payment of Provident Fund.pdf
Due Date for payment of Employee Provident Fund.docx
Amendment to Payment of Bonus Act 2015.jpg