Section 6 : Sums deductible from gross profits.
The following sums shall be deducted from the gross profits as prior charges, namely:—
- any amount by way of depreciation admissible in accordance with the provisions of sub-section (1) of section 32 of the Income-tax Act, or in accordance with the provisions of the agricultural income-tax taw, as the case may Provided that where an employer has been paying bonus to his employees under a settlement or an award or agreement made before the 29th May, 1965, and subsisting on that date after deducting from the gross profits notional normal depreciation, then, the amount of depreciation to be deducted under this clause shall, at the option of such employer (such option to be exercised once and within one year from the date) continue to be such notional normal depreciation;
- any amount by way of development rebate or investment allowance or development allowance which the employer is entitled to deductfrom his income under the income- tax Act;
- subject to the provisions of section 7, any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year;
- such further sums as are specified in respect of the employer in the Third
Section 7 : Calculation of direct tax payable by the employer.
Any direct tax payable by the employer for any accounting ye’ar shall, subject to the following provisions, be calculated at the rates applicable to the income of the employer for that year, namely:—
- in calculating such tax no account shall be taken of —
- any loss incurred by the employer in respect of any previous accounting year and carried forward under any law for the time being in force relating to direct taxes;
- any arrears of depreciation which the employer is entitled to add to the amount of the allowance for depreciation for any following accounting year or years under sub-section (2) of section 32 of the Income-tax Act;
- any exemption conferred on the employer under section 84 of the Income-tax Act or of any deduction to which he is entitled under sub-section (1) of section, 101 of that Act, as in force immediately before the commencement of the Finance Act, 1965;
- where the employer is a religious or a charitable institution to which the provisions of section 32 do not apply and the whole or any part of its Income is exempt from tax under the Income-tax Act, then, with respect to the income so exempted, such Institution shall be treated as if It were a company in which the public are substantially interested within the meaning of that Act;
- where the employer Is Individual or a Hindu Undivided Family, the tax payable by such employer under the Income-tax Act shall be calculated on the basis that the income derived by him from the establishment is his only income;
- where the income of any employer includes any profits and gains derived from the export of any goods or merchandise out of India and any rebate on such income in allowed under any law for the time being in force relating to direct taxes, then, no account shall be taken of such rebate;
- no account shall be taken of any rebate other than development rebate or investment allowance or development allowance or credit or relief or deduction (not herein before mentioned in this section) in the payment of any direct tax allowed under any law for the time being in force relating to direct taxes or under the relevant annual Finance Act, for the development of any
Section 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.
Section 9 : Disqualification for bonus.
An employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for —
- fraud; or
- riotous or violent behaviour while on the premises of the establishment; or
- theft, misappropriation or sabotage of any property of the
Section 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:
Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have effecting relation to such employee a if for the words “one hundred rupees”, the words “sixty rupees” were substituted.
Section 11 : Payment of maximum bonus.
- 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
- In computing the allocable surplus under this section, the amount set on or the amount set off under the provisions of section 15 shall be taken into account in accordance with the provisions of that
Section 12 : Calculation of bonus with respect to certain employees.
Business Low Notes :-
Where the salary or wage of an employee exceeds [two thousand and five hundred rupees] per month, 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 month.
Section’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.
Section 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—
- he has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
- he has been on leave with salary or wage;
- he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
- the employee has been on maternity leave with salary or wage, during the accounting
Section 15 : Set on and set off of allocable surplus.
- 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 z, d 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
