Allocable surplus [(Section 2(4)]
Table of Contents
Allocable surplus means—
- in relation to an employer, being a company(6ther than a banking company) which has not made the arrangements prescribed under the Income-tax Act for the declaration and payment within India of.the dividends payable out of its profits in accordance with the provisions of section 194 of that Act, sixty-seven per cent of the available surplus in an accounting; year,
- in any other case, sixty percent of such available surplus;
Appropriate Government [(Section 2(5)]
Appropriate Government means—
- in relation to an establishment in respect of which the appropriate Government under the Industrial Disputes Act, 1947 is the Central Government, the Central Government;
- in relation to any other establishment, the Government of the State in which that other establishment is
Available surplus [(Section 2(6)]
Available Surplus means the availably surplus computed under section 5.
Award [(Section 2(7)1
“Award” means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947 or by any other authority constituted under any corresponding law relating to investigation and settlement of industrial disputes in force in a State and includes an arbitration award made under section 10A of that Act or under that law.
Company [(Section 2(9)]
“Company” means any company as defined is section 3 of the Companies Act, 1956 and includes a foreign company within the meaning of section 591 of that Act.
Corporation [(Section 2(11)]
“Corporation” means any body corporate established by or under any Central, Provincial or State Act but does not include a company or a co-operative society.
Employee [(Section 2(13)]
“Emplpyee” means any person (other than an apprentice) employed on a salary or wage not exceeding [three thousand and five hundred rupees] per month in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied.
Employer [(Section 2(14)]
- in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of suph owner or occupier, fhe legal representative of a deceased owner or occupier and where a person_has been named as a manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948, the person so named; and
- in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing
Establishment in the Private Sector [(Section 2(15)]
“Establishment in private sector” means any establishment other than an establishment in public sector.
Establishment in the public Sector [(Section 2(16)]
“Establishment in public sector” means an establishment owned, controlled or managed by-
- a Government company as defined in section 617 of the Companies Act, 1956 ;
- a corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by—
- the Government; or
- the Reserve Bank of India; or
- a corporation owned by the Government or the Reserve Bank of
Salary or Wage [(Section 2(21)]
“Salary or Wage” means all remuneration (other than remuneration in respect of over-time work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include-
- any other allowance which the employee is for the time being entitled to;
- the value of any house accommodation or supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles;
- any traveling concession;
- any bonus (including incentive, production and attendance bonus);
- any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;
- any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex-gratia payment made to him;
- any commission payable to the
Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to from part of the salary or wage of such employee.’
Establishments [(Section 3)]
Where an establishment consists of different department or undertakings or has branches, whether situated in the same place or in different places, all; such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act.
Provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then such department or undertaking or branch shall be treated as a separate establishment for the purpose of computation of bonus, under this Act for that year, unless such department or undertaking or branch was, immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus.
Calculation of the Amount of Bonus Section 4 : Computation of gross profits.
The gross profits derived by an employer from an establishment in respect of the accounting year shall—
- in the case of a banking company, be calculated in the manner specified in the First Schedule;
- in any other case, be calculated in the manner specified in the Second
Section 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;
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 —
- the gross profits for that accounting year after deducting therefrom the sums referred to in section 6; and
- an amount equal to the difference between —
- the direct tax, calculated in accordance with the provisions of section 7, in respect of an amount equal to the gross profits of the employer for the immediately preceding accounting year; and
- the direct tax, calculated in accordance with the provisions of section 7, in respect of an amount equal to the gross profits of the employer for such preceding accounting year after deducting therefrom the amount of bonus which the employer has paid or is liable to pay to his employees in accordance with the provisions of this Act for that