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Pooja, Lovely Professional University Unit 12: Payment of Bonus Act, 1965

Unit 12: Payment of Bonus Act, 1965 Notes

CONTENTS
Objectives
Introduction

12.1 Objectives and Key Provisions of this Act
12.2 Definitions
12.3 Eligibility and Disqualification of Bonus

12.3.1 Eligibility for Bonus [Sec. 8]
12.3.2 Disqualification of Bonus
12.4 Computation of Bonus Payment
12.4.1 Computation of Gross Profits [Sec. 4]
12.4.2 Computation of Available Surplus [Section 5]

12.4.3 Computation of Allocable Surplus [Sec. 2 (4)]
12.4.4 Set-on and Set-off of Allocable Surplus [Sec. 15]
12.5 Powers of Inspectors Offences and Penalties [Sec. 27]

12.5.1 Powers of Inspectors
12.5.2 Offences and Penalties [Sec. 28 & 29]
12.6 Summary
12.7 Keywords
12.8 Review Questions

12.9 Further Readings

Objectives

After studying this unit, you will be able to:

 Describe an overview of Payment of Bonus Act
 Explain the definitions under this Act
 Discuss the eligibility and disqualification of bonus
 Get an overview of computation of bonus payment
 Describe the powers of inspectors offences and penalties [Sec. 27]

Introduction

The Payment of Bonus Act, 1965 was enacted to provide for the payment of bonus to persons
employed in certain establishments on the basis of profits or productivity and for the matters
connected therewith. The Act applies to:- (i) every factory as defined under the Factories Act,
1948; and (ii) every other establishment in which twenty or more persons are employed on any
day during an accounting year. However, the Government may, after giving two months’

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