ACT 21 OF 1965

1965 · State unknown · central · act_text

Sections (129)

8 · The Payment of Bonus (Amendment) Act, 1976(23 of 1976).

9 · The Payment of Bonus (Amendment) Act, 1977 (43 of 1977) [as amended by the Payment of Bonus (Amendment) Act, 1978 (48of 1978) and the Payment of Bonus (Amendment) Act, 1980 (5 of 1980)] .

16 · The Payment of Bonus (Amendment) Act, 1995 (34 of 1995).

2 · [An Act to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith.]

4 · [Provided that the appropriate Government may, after giving not less than two months' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act with effect from; such accounting year as may be specified in the notification, to any establishment or class of establishment [including an establishment being a factory within the meaning of sub-clause (ii) of clause (m) of section 2 of the Factories Act, 1948 (63 of 1948)] employing such number of persons less than twenty as may be specified in the notification; so, however, that the number of persons so specified shall in no case be less than ten.]

5 · [Provided that in relation to the State of Jammu and Kashmir, the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year shall be construed as reference to the accounting year commencing on any day in the 1968 and every subsequent accounting year:]

4 · [Provided further that when the provisions of this Act have been made applicable to any establishment or class of establishments by the issue of a notification under the proviso to sub-section (3), the reference to the accounting

1 · The Act has been extended to Goa, Daman and Die by Act 6 of 1977, sec. 2 and sch.

3 · The words "except the State of Jammu and Kashmir" omitted by Act 51 of 1970, sec. 2 and sch. (w.e.f 1-9-1971).

2 · Subs. by Act 23 of 1976, sec. 2, for the long title (w.r.e.f 25-9-1975).

4 · Ins. by Act 23 of 1976, sec. 3 (w.r.e.f 1-9-1975).

5 · Added by Act 51 of 1970 sec. 2 and sch. (w.e.f 1-9-1971)

2 · falls below twenty 2 [or, as the case may be, the number specified in the notification issued under the proviso to sub-section (3)].

2 · . Definition.- In this Act, unless the context otherwise requires,-

1 · The words "under clause (b) of sub-section (3)" omitted by Act pf 1976, sec. 3 (w.r.e.f. 25.9.1975)

3 · Omitted by Act 23 of 1976, sec. 4(w.r.e.f. 25.9.1975) and ins. by Act 66 of 1980, sec. 2 (w.r.e.f. 21.8.1980)

2 · Added by Act 23 of 1976, sec. 3 (w.r.e.f. 25.9.1975)

194o · f that Act, sixty-seven per cent of the available surplus in an accounting; year;

1 · Certain words omitted by Act 23 of 1976, sec. 4 (w.r.e.f. 25.9.1975)

3 · Ins. by Act 66 of 1980, sec. 2 (w.r.e.f. 21.8.1980)

2 · Ins. by Act 23 of 1976, sec. 4 (w.r.e.f. 25.9.1975)

1 · subs. by Act 34 of 1995, sec. 2 for 'two thousand and five hundred rupees' (w.r.e.f. 1.4.1993)

3 · Establishments to include departments, undertakings and branches.--

1 · [4. Computation of gross profits.—The gross profits derived by an employer from an establishment in respect of the accounting year shall—

5 · Computation of available surplus.—The available surplus in respect of any accounting year shall be the gross profits for that year after deducting therefrom the sums referred to in section 6;

2 · [Provided that the available surplus in respect of the accounting year commencing on any day 1968 and in respect of every subsequent accounting year shall be the aggregate of –

1 · Subs. by Act 66 of 1980, sec. 3, for section 4 (w.r.e.f. 21.8.1980)

2 · Added by Act 8 of 1969, sec. 2 (w.r.e.f. 26.3.1969)

6 · Sums deductible from gross profits.—The following sums shall be deducted from the gross profits as prior charges, namely:-

7 · Calculation of direct tax payable by the employer.— 3 [Any direct tax payable by the employer] for any accounting year shall, subject to the following provisions, be calculated at the rates applicable to the income of the employer for that year, namely:-

1 · Subs. by Act 66 of 1980, sec. 4, for :development rebate or development allowance" (w.r.e.f. 21.8.1980)

3 · Subs. by Act 8 of 1969, Sec. 3, for "For the purpose of clause (c) of section 6, direct tax payable by the employer " (w.r.e.f. 26.3.1969)

2 · Subs. by Act of 1980,, sec. 4, for "Second Schedule: (w.r.e.f. 21.8.1980)

8 · Eligibility for bonus.—Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.

9 · Disqualification for bonus.—Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for --

1 · subs. by Act 66 of 1980, sec. 5, "(other than development rebate or development allowance)"

1 · [10. Payment of minimum bonus.—Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent 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:

2 · [11. Payment of maximum bonus.—(1) Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of 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 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 per cent, of such salary or wage.

3 · [12. Calculation of bonus with respect to certain employees.—Where the

4 · salary or wage of an employee exceeds 4 [two thousand and five hundred rupees] per mensem, the bonus payable to such employee under section 10 or, as the case may be, under section 11, shall be calculated as if his salary or wage were [two thousand and five hundred rupees] per mensem.]

5 · [13. Proportionate reduction in bonus in certain cases.—Where an employee has not worked for all the working days in an accounting year, the minimum bonus of one hundred rupees or, as the case may be, of sixty rupees, if such bonus is higher than 8.33 per cent, of his salary or wage for the days he has worked in that accounting year, shall be proportionately reduced.]

14 · Computation of number of working days.—For the purposes of section 13, an employee shall be deemed to have worked in an establishment in any accounting year also on the days on which--

1 · Section 10, subs. by Act 23 of 1976, sec. 7 (w.r.e.f. 25.9.1975) and again subs. Act of 66 of 1980, sec. 6 (w.r.e.f. 21.8.1980)

3 · Section 12 omitted by Act 30of 1985, sec. 2 and ins. by Act 67of 1985, sec. 3 (w.r.e.f.7.11.1985)

2 · Section 11 omitted by Act 23 of 1976, sec. 8 (w.r.e.f. ) and ins. by Act 66 of 1980, sec. 6 (w.r.e.f. 21.8.1980)

4 · subs. by Act 34 of 1995, sec. 3 for 'one thousand and six hundred rupees' (w,.r.e.f. 1.4.1993)

5 · subs by Act 66 of 1980, sec. 8, for section 13 (w.r.e.f. 21.8.1980)

1 · [15. Set on and set off of allocable surplus.— (1) Where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under section 11, then, the excess shall, subject to a limit of twenty per cent. of the total salary or wage of the employees employed in the establishment in that accounting year, be carried forward for being set on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilized for the purpose of payment of bonus in the manner illustrated in the Fourth Schedule.

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).

1 · Subs. by Act 66 of 1980, sec. 9, for section 13 (w.r.e.f. 21.8.1980)

2 · Subs. by Act 23 of 1976, sec. 10, for sub-section (1) and Explanation thereto (w.r.e.f. 25.9.1975)

1 · 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;

1 · 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.

1 · Subs. by Act 66 of 1980, sec. 10, for "Third Schedule" (w.r.e.f. 21.8.1980)

17 · Adjustment of customary or interim bonus against bonus payable under the Act.—Whether in any accounting year --

18 · Deduction of certain amounts from bonus payable under the Act. – Where in any accounting year, an employee is found guilty of misconduct causing financial loss to the employer, then, it shall be lawful for the employer to deduct the amount of loss from the amount of bonus payable by him to the employee under this Act in respect of that accounting year only and the employee shall be entitled to receive the balance, if any.

19 · Time-limit for payment of bonus. – 2 [All amounts] payable to an employee by way of bonus under this Act shall be paid in cash by his employer --

1 · Subs by Act 23 of 1976, sec. 12, for "sub-section (1) " (w.r.e.f. 25.9.1975)

2 · subs. by Act 23 of 1976, sec. 13, for "(1) subject to the provisions of this section, all amounts : (w.r.e.f. 25.9.1975)

20 · Application of Act to establishments in public sector in certain cases.-

3 · [(1)] If in any accounting year an establishment in public sector sells any goods produced or manufactured by it or renders any services, in competition with an establishment in private sector, and the income from such sale or services or both less than twenty percent of the gross income of the establishment in public sector for that year, then, the provision of this Act shall apply in relation to such establishment in public sector as they apply in relation to a like establishment in private sector.

4 · [(2) Save as otherwise provided in sub-section (1), nothing in this Act shall apply to the employees employed by any establishment in public sector]

21 · Recovery of bonus due from an employer.- Where any money is due to an employee by way of bonus from his employer under a settlement or an award or agreement, the employee himself or any other person authorised by him in writing in this behalf, or in the case of the death of the employee, his assignee or heirs may, without prejudice to any other mode of recovery, make an application to the appropriate Government or such authority as the appropriate Government may specify in this behalf is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrears of land revenue.

1 · Sub-sections (2) to (7) ins. by Act 68 of 1972, sec. 4 (w.r.e.f. 1.9.1972) and omitted by Act 23 of 1976, sec. 13 (w.r.e.f. 25.9.1975)

3 · The brackets and figure (1) omitted by Act 23 of 1976, sec. 14 (w.r.e.f. 25.9.1975) and again section 20 re-numbered as sub-section (1) thereof by Act 66 of 1980, sec. 11 (w.r.e.f. 27.12.1980)

4 · 4 sub-section (2) omitted by Act of 1976, sec, 14(w.r.e.f. 25.9.1975) and ins. by Act 66 of 1980, sec.

2 · Sub-section (8) ins. by Act 39 of 1973, sec. 4(w.r.e.f. 1.9.1973) and omitted by Act 55 of 1973, sec. 2 (w.r.e.f 1.9.1973)

5 · Subs. By Act 66 of 1980, sec. 12, for "sections 22,23 and 25" (w.r.e.f. 21.8.1980)

22 · Reference of disputes under the Act.- Where any dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment in public sector, then, such dispute shall be deemed to be an industries dispute within the meaning of the Industrial Disputes Act, 1947 (14 of 1947), or of any corresponding law relating to investigation and settlement of industrial disputes in force in a State and the provisions of that Act or, as the case may be, such law, shall, save as otherwise expressly provided, apply accordingly.

23 · Presumption about accuracy of balance-sheet and profit and loss account of corporation and companies.- Where, during the course of proceedings before any arbitrator or Tribunal under the Industrial Disputes Act, 1947 (14 of 1947) or under any corresponding law relating to investigation and settlement of industrial disputes in force in a State (hereinafter in this section

12 · 1 [and in 2 [sections 24 and 25] referred to as the "said authority" ) to which any dispute of the nature specified in section 22 has been referred, the balance-sheet and the profit and loss account of an employer, being a corporation or a company (other than a banking company), duly audited by the comptroller and AuditorGeneral of India or by auditors duly qualified to Act as auditors of companies under sub-section (1) of section 226 of the Companies Act, 1956 (1 of 1956), are produced before it, then, the said authority may presume the statements and particulars contained in such balance-sheet and profit and loss account to be accurate and it shall not be necessary for the corporation or the company to prove the accuracy of such statements and particulars by the filing of an affidavit or by any other mode.

3 · [24. Audited accounts of banking companies not to be questioned. –(1) Where any dispute of the nature specified in section 22 between an employer , being a banking company, and its employees has been referred to the said authority under that section and during the course of proceedings the accounts of the banking company duly audited and produced before it, the said authority shall not permit any trade union or employees to question the correctness of such

1 · Subs. by Act 23 of 1976 , Sec. 16, for "and in sections 24 and 25" (w.r.e.f. 25.9.1975).

3 · Ins. by Act 66 of 1980 , sec. 14 (w.r.e.f. 21.8.1980)

2 · Subs. by Act 66 of 1980, sec. 13, for "section 25" (w.r.e.f. 21.8.1980)

25 · Audit of accounts of employers, not being corporations or companies.-

26 · Maintenance of register, records, etc . – Every employer shall prepare and maintain such registers, records and other documents in such form and in such manner as may prescribed.

27 · Inspectors. – (1) The appropriate Government may, by notification on the Official Gazette, appoint such person as it think fit to be Inspectors for the purposes of this Act and may define the limits within which they shall exercise jurisdiction.

1 · [(5) Nothing contained in this section shall enable an Inspector to require a banking company to furnish or disclose any statement or information or to produce, or give inspection of any its books of account or other documents which a banking company cannot be compelled to furnish, disclose, produce or give inspection of, under the provision of section 34A of the Banking Regulation Act, 1949 (10 of 1949).

28 · . Penalty.- if any person-

29 · Offences by companies.- (1) If the person committing an offence under this Act is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

1 · Ins. by Act 66 of 1980, sec. 15 (w.r.e.f. 21.8.1980)

30 · Cognizance of offences. – (1) No court shall take cognizance of any offence punishable under this Act, save on complaint made by or under the

1 · authority of the appropriate Government 1 [or an officer of that Government (not below the rank of a Regional Labour Commissioner in the case of an officer of the Central Government, and not below the rank of a Labour Commissioner in the case of an officer of the State Government) specially authorised in this behalf by that Government].

31 · Protection of action taken under the Act. – No suit, prosecution or other legal proceeding shall lie against the Government or any officer of the Government for anything which is in good faith done or intended to be done in pursuance of this Act or any rule made thereunder.

2 · [31A. Special provision with respect to payment of bonus linked with production or productivity. – Notwithstanding anything contained in this Act,--

1 · Ins. by Act 66 of 1980, sec. 16 (w.r.e.f. 21.8.1980)

2 · Ins. by Act 23 of 1976, sec. 19 (w.r.e.f. 25.9.1975)

1 · [Provided that any such agreement or settlement whereby the employees relinquish their right to receive the minimum bonus under section 10 shall be null and void in so far as it purports to deprive them of such right:]

2 · [Provided further that] such employees shall not be entitled to be paid such bonus in excess of twenty per cent. of the salary or wage earned by them during the relevant accounting year.

32 · Act not to apply to certain classes of employees. – Nothing in this Act shall apply to --

3 · [***] employees employed by any insurer carrying on general insurance business and the employees employed by the Life Insurance Corporation of India;

4 · [***]

5 · [(d)the National Bank for Agriculture and Rural Development;]

1 · Ins. by Act 66 of 1980, sec. 17 (w.r.e.f. 21.8.1980)

3 · the words "employees employed by any insurer carrying on general insurance business and the" omitted by Act 62 of 1968, sec. 41.

2 · Subs. by Act 66 of 1980, sec. 17, for "Provided that" (w.r.e.f. 21.8.19800

4 · Clause (vii) omitted by Act 66 of 1980, sec, 18 (w.r.e.f. 21.8.1982)

5 · Subs. by Act of 1981, sec. 61 and Sch.II, for sub-clause (d) (w.r.e.f. 12.7.1982)

1 · [(fa) the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989;]

2 · [(ff)the National Housing Bank;]

33 · Act to apply to certain pending disputes regarding payment of bonus.[Rep. By the Payment of Bonus (Amendment) Act, 1976 (23 of 1976), sec. 21 (w.r.e.f. 25-9-1975).]

5 · [34. Effect of laws and agreements inconsistent with the Act. – Subject to the provisions of section 31A, the provisions of this Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service.]

35 · Saving. – Nothing, contained in this Act shall be deemed to affect the provisions of the Coal Mines, Provident Fund and Bonus Schemes Act, 1948 (48 for 1948), or of any scheme made thereunder.

36 · Power of exemption. – If the appropriate Government, having regard to the financial position and other relevant circumstances of any establishment or class of establishment, is of opinion that it will not be in public interest to apply all or any of the provisions of this Act thereto, it may, by notification in the Official Gazette, exempt for such period as maybe specified therein and subject to such conditions as it may think fit to impose, such establishment or class of establishment from all or any of the provisions of this Act.

37 · Power to remove difficulties. – [Rep. by the Payment of Bonus (Amendment) Act, 1976 (23 of 1976), sec. 23 (w.r.e.f. 25-9-1975).]

1 · Ins. by Act 39 of 19879, sec. 53 and Sch.II.

2 · Omitted by Act 66 of 1980, sec. 18 (w.r.e.f. 21.8.1980) and ins. by Act 53 of 1987, sec. 56 and

4 · Clause (x) omitted by Act 23 of 1976, sec. 20 (w.r.e.f 25.9.1975)

3 · Ins. by Act 66 of 1980, sec. 18 (w.r.e.f. 21.8.1980)

5 · Subs. by Act 23 of 1976, sec. 22, for section 34 (w.r.e.f. 25.9.1975)

38 · Power to make rules. – (1) The Central Government may make rule for the purpose of carrying into effect the provisions of this Act.

39 · Application of certain law not barred. –Save as otherwise expressly provided, the provisions of this Act shall be in addition to and not in derogation of the Industrial Disputes Act, 1947 (14 of 1947), or any corresponding law relating to investigation and settlement of industrial disputes in force in a State.

40 · Repeal and saving. – (1) The Payment of Bonus Ordinance, 1965 (3 of 1965), is hereby repealed.

2 · [See section 4(a)] COMPUTATION OF GROSS PROFITS

1 · For the heading "THE SECOND SCHEDULE", the heading 'THE FIRST SCHEDULE" subs. by Act 23 of 1976, sec. 26 ( w.r.e.f 25.9.1976) and again the First Schedule renumbered as the Second Schedule by Act 66 of 1980, sec. 19 (w.r.e.f 21.8.1980)

3 · Subs. by Act 66 of 1980, sec. 19, for entry (d) (w.r.e.f. 21.8.1980).

2 · For the sub-heading "[see Section 4(b)]", the sub-heading "(See section 4)" subs by Act 23 of 1976, sec. 261 (w.r.e.f.25.9.1976) and again subs. by Act 66 of 1980, sec. 19 (w.r.e.f. 21.8.1980).

4 · Ins. by Act 23 pf 1976, sec. 26 (w.e.r.f 25.9.1975)

1 · Subs. by Act 23 of 1976, sec. 26, for sub-item (g) (w.e.r.f 225.9.1975).

2 · [Explanation- In sub-item (aa) of item 3, 'approved gratuity fund' has the same meaning assigned to it in clause (5) of section 2 of the Income-Tax Act.]

3 · [THE THRID SCHEDULE

2 · Ins. by Act 23 of 1976, sec. 26. (w.r.e.f 25.9.1976)

4 · Subs by Act 66 of 1980, sec. 20, for " Company" (w.r.e.f. 21.8.1980)

3 · For the heading " THE THIRD SCHEDULE" THE HEADING " THE SECOND SCHEDULE" subs. by Act 23 of 1976, sec. 27 (w.r.e.f. 12.8.1980)

1 · Ins. by Act 66 of 1980, sec. 20 (w.r.e.f 231.8.1980)

2 · [THE FOURTH SCHEDULE

1 · Subs. by Act 66 of 1980, sec. 20, for " 1(iii) and 3(ii)" (w.r.e.f 21.8.1980)

2 · "THE FOURTH SCHEDULE " was subs. by "THE THIRD SCHEDULE" BY Act 23 of 1976, sec. 23 (w.r.e.f. 25.9.1976) and THE THIRD SCHEDULE so substituted was again subs. by Act 66 of 1980, sec. 21 (w.r.e.f. 21.8.1980)

ACT 21 OF 1965

Sections (129)

Subordinates (0)