Someone please explain the section 16 (1A) (1B) (1C) of the Payment of Bonus Act, 1965.
From India, Madras
1From India, Madras
Dear Friend,
Sec.16-1A-In the first five accounting years following the accounting year in which the employer sells the goods produced or manufactured by him or renders services as the case may be, bonus shall be payable only in respect of the accounting year in which the employer derives profit and such bonus shall be calculated in accordandance with the provisions of the act.
1B-For Sixth and seventh accounting years in which the employer sells the goods produced or manufactured by him or render services taking into account the excess or deficiency, if any as the case may be, of the allocable surplus set on or set off in the year fifth and sixth accounting years.
1C-From the eighth accounting year Sec.15 shall apply -(a) he has made provisions for that year's depreciation to which he is entitled under the IT Actor as the case may be under the agricultural income tax law (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.
Have a nice day
Lalit Kumar Gupta
From India, Lucknow
Sec.16-1A-In the first five accounting years following the accounting year in which the employer sells the goods produced or manufactured by him or renders services as the case may be, bonus shall be payable only in respect of the accounting year in which the employer derives profit and such bonus shall be calculated in accordandance with the provisions of the act.
1B-For Sixth and seventh accounting years in which the employer sells the goods produced or manufactured by him or render services taking into account the excess or deficiency, if any as the case may be, of the allocable surplus set on or set off in the year fifth and sixth accounting years.
1C-From the eighth accounting year Sec.15 shall apply -(a) he has made provisions for that year's depreciation to which he is entitled under the IT Actor as the case may be under the agricultural income tax law (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.
Have a nice day
Lalit Kumar Gupta
From India, Lucknow
Hi Lalit Kumar Gupta,
Thanks for your reply, quite okay to help me get started.
To me Section (1B) and (1C) mean the same, with that in mind I have framed the highlights as below.
Please modify if fine-tuning is needed, also correct if my understanding of the same is wrong.
The special provision with respect to certain establishment stated under section 16 (1A) (1B) (1C) is applicable as listed below.
Stanley Jones
From India, Madras
Thanks for your reply, quite okay to help me get started.
To me Section (1B) and (1C) mean the same, with that in mind I have framed the highlights as below.
Please modify if fine-tuning is needed, also correct if my understanding of the same is wrong.
The special provision with respect to certain establishment stated under section 16 (1A) (1B) (1C) is applicable as listed below.
- ->For newly established concern only.
->Bonus is applicable only from the year, the profit is accounted
->Payment of Minimum Bonus or Payment of Maximum Bonus is not applicable for the first five years.
->Set-on or Set-off is not calculated for the first five years.
->For the sixth, seventh and eighth accounting year Payment of Minimum Bonus or Payment of Maximum Bonus is applicable.
->Set-on or Set-off is calculated and carried for the sixth, seventh and eighth accounting year.
Stanley Jones
From India, Madras
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