Hi Seniors,
Please see the link as the President has signed the new Bonus Act today, where the ceiling for eligibility for payment of bonus has been raised from the salary or wage of Rs. 3500/- per month to Rs. 10000/- per month. http://pib.nic.in/release/release.asp?relid=32264
However, as an HR professional in the KPO industry, I am unsure if we are covered under this Act. Is the ITES industry included in the new Bonus Act?
Please respond today.
From Spain
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1Please see the link as the President has signed the new Bonus Act today, where the ceiling for eligibility for payment of bonus has been raised from the salary or wage of Rs. 3500/- per month to Rs. 10000/- per month. http://pib.nic.in/release/release.asp?relid=32264
However, as an HR professional in the KPO industry, I am unsure if we are covered under this Act. Is the ITES industry included in the new Bonus Act?
Please respond today.
From Spain
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Dear Bharat,
Thank you very much for the information. By the way, I think it is applicable to everyone, but I am not sure about that. I will definitely keep you informed once I get the information. Friends, can any of you confirm this for us?
Regards,
Amith R.
From India, Bangalore
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Thank you very much for the information. By the way, I think it is applicable to everyone, but I am not sure about that. I will definitely keep you informed once I get the information. Friends, can any of you confirm this for us?
Regards,
Amith R.
From India, Bangalore
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Hello,
As per the new amendment signed, the other things remain unchanged so that we can enjoy the bonus if paid less than $10,000. Only one thing is applicable where your company may not pay any bonus, i.e., if your establishment has not completed 5 years.
Regards,
From India, Ahmadabad
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As per the new amendment signed, the other things remain unchanged so that we can enjoy the bonus if paid less than $10,000. Only one thing is applicable where your company may not pay any bonus, i.e., if your establishment has not completed 5 years.
Regards,
From India, Ahmadabad
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hi All hr Gurus plz let me know the lower and upper limit of bonus amount. Regards Deepinder
From India, Pune
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From India, Pune
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hi All hr Gurus plz let me know the lower and upper limit of bonus amount. it is urgent Regards Deepinder
From India, Pune
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From India, Pune
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Dear Shahanal,
Thank you for the update. Kindly confirm if the effective date is the 1st of April as mentioned in the link provided. Also, please clarify point number two in the link below, as quoted from the press release statement:
(ii) Amendment to Section 12 of the Payment of Bonus Act, 1965 to raise the ceiling for calculation purposes from the salary or wage of Rs. 2500/- per month to Rs. 3500/- per month;
I look forward to your response.
Regards,
Amith R.
From India, Bangalore
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Thank you for the update. Kindly confirm if the effective date is the 1st of April as mentioned in the link provided. Also, please clarify point number two in the link below, as quoted from the press release statement:
(ii) Amendment to Section 12 of the Payment of Bonus Act, 1965 to raise the ceiling for calculation purposes from the salary or wage of Rs. 2500/- per month to Rs. 3500/- per month;
I look forward to your response.
Regards,
Amith R.
From India, Bangalore
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Hello,
As your company is 3.5 years old, it may or may not pay bonuses. It is solely at the management's discretion. If it is a good profit-making company, then it may pay a bonus, but they are not bound to do so.
The minimum bonus shall be 8.33 percent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year.
The maximum bonus shall be: In respect of any accounting year referred to in Section 10, if the allocable surplus exceeds the amount of the minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year a bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year, subject to a maximum of twenty percent of such salary or wage.
Any amount can be paid above the maximum limit also, but that shall be treated under the head of ex gratia payment.
Regards,
From India, Ahmadabad
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As your company is 3.5 years old, it may or may not pay bonuses. It is solely at the management's discretion. If it is a good profit-making company, then it may pay a bonus, but they are not bound to do so.
The minimum bonus shall be 8.33 percent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year.
The maximum bonus shall be: In respect of any accounting year referred to in Section 10, if the allocable surplus exceeds the amount of the minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year a bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year, subject to a maximum of twenty percent of such salary or wage.
Any amount can be paid above the maximum limit also, but that shall be treated under the head of ex gratia payment.
Regards,
From India, Ahmadabad
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Thanks Shahanal,
Can you help with the link where it is mentioned that the establishment should be at least 5 years old? Or do you have a soft copy of the same? Also, does KPO come under an establishment?
From Spain
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Can you help with the link where it is mentioned that the establishment should be at least 5 years old? Or do you have a soft copy of the same? Also, does KPO come under an establishment?
From Spain
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Hello Amit,
I am not getting the Bonus Act now, so I am not much clear about Section 12, but it is likely to say that the maximum payment of bonus, which was previously 2500/-, is increased to 3500/-.
This is good news for all those who are eligible for the bonus under the Bonus Act.
Regards,
From India, Ahmadabad
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I am not getting the Bonus Act now, so I am not much clear about Section 12, but it is likely to say that the maximum payment of bonus, which was previously 2500/-, is increased to 3500/-.
This is good news for all those who are eligible for the bonus under the Bonus Act.
Regards,
From India, Ahmadabad
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Hello Bharat,
Sorry I was unable to find the soft copy of the whole document but here is the section mentioning that...
It is Section 16 of the act,
__________________________________________________ _______
16. Special provisions with respect to certain establishment— 2[(1) Where an establishment newly set up, whether before or after the commencement of this Act, the employees of such establishment shall be entitled to be paid bonus under this Act in accordance with the provisions of sub-section (1A), (1B) and (1C).
(1A) In the first five accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, bonus shall be payable only in respect of the accounting year in which the employer derives profit from such establishment and such bonus shall be calculated in accordance with the provisions of this act in relation to that year, but with out applying the provisions of section 15.
(1B) For the sixth and seventh accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, the provisions of section 15 shall apply subject other following modifications, namely:--
(i) for the sixth accounting year --
set on or set off, as the case may be, shall be made in the manner illustrated in the 1[Fourth Schedule] taking into account the excess or deficiency, if any, as the case may be, of the allocable surplus set on or set off in respect of the fifth and sixth accounting years;
(ii) for the seventh accounting year --
set on or set off, as the case may be, shall be made in the manner illustrated in the 1[Fourth Schedule] taking into account the excess or deficiency, if any, as the case may be, of the allocable surplus set on or set off in respect of the fifth, sixth and seventh accounting year.
(1C) From the eighth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, the provisions of section 15 shall apply in relation to such establishment as they apply in relation to any other establishment.
Explanation I. – For the purpose of sub-section (1), an establishment shall not be newly set up merely by reason of a change in its location, management, name or ownership.
Explanation II. -- For the purpose of sub-section (1A), an employer shall not be deemed to have derived profit in any accounting year unless –
(a) he has made provision for that year's depreciation to which he is entitled under the Income-tax Act or, as the case may be, under the agricultural income-tax, law; and
(b) the arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set off against his profits.
Explanation III. – For the purpose of sub-section (1A), (1B) and (1C), sale of the goods produced or manufactured during the course of the trial running of any factory or of the prospecting stage of any mine or an oil field shall not be taken into consideration and where any question arises with regard to such production or manufacture, the decision of the appropriate Government, made after giving the parties a reasonable opportunity of representing the case, shall be final and shall not be called in question by any court or other authority.]
(2) The provisions of 1[sub-section (1), (1A), (1B) and (1C)] shall, so far as may be, apply to new departments or undertakings or branches set up by existing establishments:
Provided that if an employer in relation to an existing establishment consisting of different (departments or undertakings or branches (whether or not in the same industry) set up at different periods has, before the 29th May, 1965, been paying bonus to the employees of all; such departments or undertakings or branches, irrespective of the date on which such departments or undertakings or branches were set up, on the basis of the consolidated profits computed in respect of all such departments or undertaking or branches, then, such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employees of all such departments or undertaking or branches (whether set up before or after that date) on the basis of the consolidated profits computed as aforesaid.
__________________________________________________ __________
Regards,
From India, Ahmadabad
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Sorry I was unable to find the soft copy of the whole document but here is the section mentioning that...
It is Section 16 of the act,
__________________________________________________ _______
16. Special provisions with respect to certain establishment— 2[(1) Where an establishment newly set up, whether before or after the commencement of this Act, the employees of such establishment shall be entitled to be paid bonus under this Act in accordance with the provisions of sub-section (1A), (1B) and (1C).
(1A) In the first five accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, bonus shall be payable only in respect of the accounting year in which the employer derives profit from such establishment and such bonus shall be calculated in accordance with the provisions of this act in relation to that year, but with out applying the provisions of section 15.
(1B) For the sixth and seventh accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, the provisions of section 15 shall apply subject other following modifications, namely:--
(i) for the sixth accounting year --
set on or set off, as the case may be, shall be made in the manner illustrated in the 1[Fourth Schedule] taking into account the excess or deficiency, if any, as the case may be, of the allocable surplus set on or set off in respect of the fifth and sixth accounting years;
(ii) for the seventh accounting year --
set on or set off, as the case may be, shall be made in the manner illustrated in the 1[Fourth Schedule] taking into account the excess or deficiency, if any, as the case may be, of the allocable surplus set on or set off in respect of the fifth, sixth and seventh accounting year.
(1C) From the eighth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, the provisions of section 15 shall apply in relation to such establishment as they apply in relation to any other establishment.
Explanation I. – For the purpose of sub-section (1), an establishment shall not be newly set up merely by reason of a change in its location, management, name or ownership.
Explanation II. -- For the purpose of sub-section (1A), an employer shall not be deemed to have derived profit in any accounting year unless –
(a) he has made provision for that year's depreciation to which he is entitled under the Income-tax Act or, as the case may be, under the agricultural income-tax, law; and
(b) the arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set off against his profits.
Explanation III. – For the purpose of sub-section (1A), (1B) and (1C), sale of the goods produced or manufactured during the course of the trial running of any factory or of the prospecting stage of any mine or an oil field shall not be taken into consideration and where any question arises with regard to such production or manufacture, the decision of the appropriate Government, made after giving the parties a reasonable opportunity of representing the case, shall be final and shall not be called in question by any court or other authority.]
(2) The provisions of 1[sub-section (1), (1A), (1B) and (1C)] shall, so far as may be, apply to new departments or undertakings or branches set up by existing establishments:
Provided that if an employer in relation to an existing establishment consisting of different (departments or undertakings or branches (whether or not in the same industry) set up at different periods has, before the 29th May, 1965, been paying bonus to the employees of all; such departments or undertakings or branches, irrespective of the date on which such departments or undertakings or branches were set up, on the basis of the consolidated profits computed in respect of all such departments or undertaking or branches, then, such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employees of all such departments or undertaking or branches (whether set up before or after that date) on the basis of the consolidated profits computed as aforesaid.
__________________________________________________ __________
Regards,
From India, Ahmadabad
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Hi Bharat,
Your BPO/KPO setup is covered under statutory bonus if either of the conditions is fulfilled under the law:
1. The company has been operational for 5 years.
2. The company has booked profits at any time during these 5 years.
Please verify whether your company has booked profits. If yes, your company is covered, and covered employees are entitled to this benefit under the amendment.
Rahul 😊
From India, New Delhi
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Your BPO/KPO setup is covered under statutory bonus if either of the conditions is fulfilled under the law:
1. The company has been operational for 5 years.
2. The company has booked profits at any time during these 5 years.
Please verify whether your company has booked profits. If yes, your company is covered, and covered employees are entitled to this benefit under the amendment.
Rahul 😊
From India, New Delhi
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Dear Bharat,
Thank you for the information.
Regarding your query, for the first five years of any establishment, a bonus is not payable. Therefore, your company is currently not eligible for a bonus. The calculation of the five years starts from the date of the first commercial transaction. This means that you will have to pay a bonus for the sixth year of operation. However, since bonuses are paid in the following year, the bonus for the sixth year will become payable in the seventh year of operation.
KKT
From India, Delhi
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Thank you for the information.
Regarding your query, for the first five years of any establishment, a bonus is not payable. Therefore, your company is currently not eligible for a bonus. The calculation of the five years starts from the date of the first commercial transaction. This means that you will have to pay a bonus for the sixth year of operation. However, since bonuses are paid in the following year, the bonus for the sixth year will become payable in the seventh year of operation.
KKT
From India, Delhi
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Deepender,
According to the Bonus Act of 1965, a minimum bonus of 8.33 percent of the salary or wage earned by the employee during the accounting year is required, with a maximum of twenty percent of such salary or wage. Please confirm this information with the Act.
Thank you,
Bharat
From Spain
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According to the Bonus Act of 1965, a minimum bonus of 8.33 percent of the salary or wage earned by the employee during the accounting year is required, with a maximum of twenty percent of such salary or wage. Please confirm this information with the Act.
Thank you,
Bharat
From Spain
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