REGISTERED No. D- ( D ) -72
रजिस्ट्री से० डी-(डी) -72
भारत का राजपत्र
The Gazette of India
असाधारण
EXTRAORDINARY
भाग II -खण्ड 1
PART II-Section 1
प्राधिकार मे प्रकाशित
PUBLISHED BY AUTHORITY
सं० 49]
नई दिल्ली, शनिवार, सितम्बर 3 , 1977/भाद्र 12, 1899
No. 49] NEW DELHI , SATURDAY , SEPTEMBER 3 , 1977/BHADRA 12 , 1899
इस भाग में भिन्न पृष्ठ संख्या वी जाती है जिससे कि यह अलग संकलन के रूप में रखा जा सके ।
Separate paging is given to this Part in order that it may be filed as a separate compilation
MINISTRY OF LAW , JUSTICE AND COMPANY AFFAIRS (Legislative Department)
New Delhi , the 3rd September, 1977 / Bhadra 12 , 1899 ( Saka)
THE PAYMENT OF BONUS ( AMENDMENT )
ORDINANCE , 1977
No. 9 OF 1977
Promulgated by the President in the Twenty- eighth Year of the Republic of India .
An Ordinance further to amend the Payment of Bonus
Act, 1965 .
WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action ,
NOW , THEREFORE, in exercise of the powers conferred by clause ( 1 ) of article 123 of the Constitution , the President is pleased to promulgate the following Ordinance
1 ( 1 ) This Ordinance may be called the Payment of Bonus (Amend- ment) Ordinance , 1977 .
Short title and com- mence- ment (2) It shall come into force at once
2. The Payment of Bonus Act , 1965 (hereinafter referred to as the prin- cipal Act ) shall ,-
Act 21 of 1965 to have modı- hed effect for a particular period, (a) in relation to a factory or other establishment to which the principal Act applies immediately before the commencement of this Ordinance ; and
(323) [PART II-
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324
(b) in relation to a banking company and the Industrial Recons- truction Corporation of India to which the principal Act applies on and from such commencement by virtue of this Ordinance ,
have effect in respect of the accounting year commencing on any day in the year 1976 as if the amendments specified in sections 3 to 19 had been made in that Act
Explanation.-- In this section , the expressions " banking company" and " accounting year " shall have the meanings respectively assigned to them in clauses ( 8) and ( 1 ) of section 2 of the principal Act
3 In the principal Act , for the long title, the following long title shall be substituted, namely : ----
Substitu- tion of long title.
"An Act to provide for the payment of bonus to persons employed in certain establishments and for matters connected therewith "
Amend- ment of section 2 .
4 In section 2 of the principal Act , in sub -clause ( a ) of clause (4 ) , after the words " being a company " , the brackets and words " ( other than a banking company) " shall be inserted.
5. For section 4 of the principal Act , the following section shall be substituted , namely :
Substitu- tion of new sec . tion for section 4.
"4. The gross profits derived by an employer from an establish- ment in respect of the accounting year shall-
(a) in the case of a banking company , be calculated in the Computa- tion of gross pro . fits.
manner specified in the First Schedule ;
(b) in any other case, be calculated in the manner specified in the Second Schedule ." .
6. In section 6 of the principal Act,---
Amend- mentof section 6.
(a) in clause (b ) , for the words " development rebate or develop- ment allowance " , the words " development rebate or investment allowance or development allowance " shall be substituted ;
(b) in clause (d), for the words " Second Schedule " , the words "Third Schedule" shall be substituted
7. In section 10 of the principal Act ,--
Amend- ment of section 10,
(a) after sub - section ( 2 ) , the following sub - section shall be inserted , namely : -
'(2A) Notwithstanding anything contained in sub - section ( 1) , every employer shall be bound to pay to every employee a mınimum bonus which shall be 833 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 em- ployer 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 provi- sions of this sub- section shall have effect in relation to such employee as if for the words " one hundred rupees " , the words "sixty rupees " were substituted. ' ;
(b) in sub -section (3 ) , for the words " Third Schedule " , the words "Fourth Schedule " shall be substituted.
THE GAZETTE OF INDIA EXTRAORDINARY
SEC. 11
325
8. In section 15 of the principal Act , for the words " Third Schedule " Amend- wherever they occur , the words " Fourth Schedule " shall be substituted .
ment of section 15
9. In section 16 of the principal Act , in sub-section ( 1B) , for the words Amend- "Third Schedule " at both the places where they occur, the words " Fourth ment of Schedule" shall be substituted . section 16
Amend- ment of section 21 .
10. In section 21 of the principal Act , in the Explanation , for the words and figures " sections 22, 23 and 25 " , the words and figures " sections 22 , 23, 24 and 25" shall be substituted
ment of section 23 .
11. In section 23 of the principal Act , in sub- section ( 1 ) , for the word Amend- and figures " section 25 " , the words and figures " sections 24 and 25 " shall be substituted .
12 After section 23 of the principal Act , the following section shall be Insertion inserted , namely : - ofnew section 24 .
ing Audited accounts of bank- companies not to be ques- " 24. ( 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 are produced before it , the said authority shall not permit any trade union or employees to question the correctness of such accounts , but the trade union or the employees may be permitted to tioned obtain from the banking company such information as is necessary for verifying the amount of bonus due under this Act.
10 of 1949 .
(2) Nothing contained in sub - section ( 1) shall enable the trade union or the employees to obtain any information which the banking company is not compelled to furnish under the provisions of section 34A of the Banking Regulation Act , 1949." .
Amend- mentof section 27.
13. In section 27 of the principal Act , after sub- section (4) , the follow- ing sub- section shall be inserted, namely : -
10 of 1949 ,
"(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 of its books of account or other documents , which a banking company cannot be compelled to furnish , disclose , produce or give inspection of, under the provisions of section 34A of the Banking Regulation Act, 1949." .
ment of section 31A.
14 In section 31A of the principal Act , in the proviso , for the words Amend- "Provided that " , the words " Provided further that " shall be substituted and before the proviso as so amended, the following proviso shall be inserted , namely
"Provided that any such agreement or settlement whereby the employees relinquish their right to receive the minimum bonus under sub- section ( 2A ) of section 10 shall be null and void in so far as it purports to deprive them of such right ".
15. In section 32 of the principal Act,-
Amend- ment of section 32 .
(a) clause ( vii ) shall be omitted ;
(b ) in clause ( ix ) ,-
(1) sub - clause (ff) shall be omitted ;
| 326
THE GAZETTE OF INDIA EXTRAORDINARY
[PART 11-
(n) in sub - clause ( g ) , after the words " financial institution ", the brackets and words " ( other than a banking company) " shall be inserted .
16. For section 34 of the principal Act , the following sections shall be substituted , namely
Substitu- tion of new sec- tion for section 34 .
"34. Nothing contained in this Act shall be construed to preclude employees employed in any establishment or class of establishments from entering into agreement with their employer for granting them an amount of bonus under a formula which is different from that under this Act :
Provided that no such agreement shall have effect unless it is entered into with the previous approval of the appropriate Govern- ment :
Employees and em- ployers not to be pre- cluded from enter- ing into agree- ments for grant of bonus under a different formula .
Provided further that any such agreement whereby the employees relinquish their right to receive the minimum bonus under sub - section ( 2A) of section 10 shall be null and void in so far as it purports to deprive them of such right :
Provided also that such employees shall not be entitled to be paid bonus in excess of-
(a ) 833 per cent . of the salary or wage earned by them during the accounting year if the employer has no allocable sur- plus in the accounting year or the amount of such allocable sur plus is only so much that , but for the provisions of sub- section (2A) of section 10 , it would entitle the employees only to receive an amount of bonus which is less than the aforesaid percentage , or
(b ) twenty per cent . of the salary or wage earned by them during the accounting year .
34A. Subject to the provisions of sections 31A and 34, the provi- sions of this Act shall have effect notwithstanding anything incon- sistent therewith contained in any other law for the time being in force or in the terms of any award , agreement , settlement or contract of service . " .
Effectof laws and agree- ments in- consistent with the Act.
17 In the principal Act , the First Schedule shall be renumbered as the Second Schedule and,-
Amend- ment of the First Schedule .
(a) in that Schedule as so renumbered-
(2) for the brackets , words and figure " ( See section 4) " , the brackets , words , figure and letter " [See section 4 ( b ) ] " shall be substituted;
(ii) in column ( 2 ) , against Item No. 2 , for the entry " (d) Development rebate/Development allowance reserve . " the entry "(d) Development rebate /Investment allowance / Development allowance reserve . " shall be substituted ;
THE GAZETTE OF INDIA EXTRAORDINARY
SEC . 1 )
337
(b) before that Schedule as so renumbered , the following Schedule shall be inserted , namely
' THE FIRST SCHEDULE
[See section 4( a ) ]
COMPUTATION OF GROSS PROFITS
Accounting Year ending .
Particulars
Remarks
Amount of main- items
Item No.
Amount of sub - items
Rs .
Rs .
* 1 . Net Profit as shown in the Profit and Loss Account after making usual and necessary provisions .
2. Add back provision for :
(a) Bonus to employees .
(b) Depreciation .
(c) Development Rebate Reserve .
See foot- note (1)
(d) Any other reserves .
See foot- note (1)
Total of Item No. 2
Rs .
3. Add back also :
See foot- note (1)
(a) Bonus paid to employees , in respect of previous accounting years .
(b) The amount debited in res- pect of gratuity paid or payable to employees in excess of the aggregate of-
(1) the amount, if any, paid to, or provided for pay- ment to, an approved gratuity fund; and
(n) the amount actually paid to employees on their retirement or on termination of their employment for any reason .
(c) Donations in excess of the amount admissible for income-tax .
See foot- note (1)
(d) Capital expenditure ( other than capital expenditure on scientific research which is allowed as a deduction under any law for the time being in force relating to direct taxes) and capital losses (other than losses on sale of capital assets on which depreciation has been allowed for income-tax) .
Where the profit subject to taxation is shown in the Profit and Loss Account and the provisionmade for taxes on Income is shown , the actual provision for taxes on income shall be deducted from the profit .
[ PART II-
THE GAZETTE OF INDIA EXTRAORDINARY
328
Particulars
Remarks
Amount of main-items
Amount of sub - items
Item No.
Rs.
Rs .
(e) Any amount certified by the Reserve Bank of India in terms of sub - section (2) of section 34A of the Banking Regulation Act, 1949 .
10 of1949
(f) Losses of, or expenditure relating to , any business situated outside India .
Rs .
Total of Item No. 3
4. Add also income, profits or gains (if any) credited directly to published or disclosed reserves , other than--
(i) capital receipts and capital profits (including profits on the sale of capital assets on which depreciation has not been allowed for income- tax);
(ii) profits of, and receipts re- lating to , any business situated outside India;
(iii) income of foreign banking companies from investments outside India.
Rs.
Net total of Item No. 4
Rs .
5. Total of Item Nos . 1 , 2, 3 and 4
6. Deduct :
See foot- note(2)
(a) Capital receipts and capital profits (other than profits on the sale of assets on which depreciation has been allow- ed for income-tax)
See foot-
note(2)
(b) Profits of, and receipts relating to, any business situated outside India .
See foot- note(2)
(c) Income of foreign banking companies from investments outside India.
(d) Expenditure or losses ( if any) debited directly to published or disclosed reserves , other than-
(1) capital expenditure and capital losses (other than losses on sale of capital assets on which depre- ciation has not been allowed for income-tax) ;
SEC 1 ]
THE GAZETTE OF INDIA EXTRAORDINARY
329
Particulars
Amount of Remarks main - items
Item No.
Amount of
sub - items
Rs.
Rs .
(ii) losses of any business situated outside India.
See foot- note (3)
(e) In the case of foreign bank- ing companies proportionate administrative (overhead) expenses of Head Office allocable to Indian business .
See foot- note (2)
(f) Refund of any excess direct tax paid for previous ac- counting years and excess provision, if any, of previous accounting years, relating to bonus, depreciation , or de- velopment rabate, if written back.
See foot- note (2)
1 of 1956 , (g) Cash subsidy, if any , given by the Government or by any body corporate established by any law for the time being in force or by any other agency through budgetary grants,whether given directly or through any agency for specified purposes and the proceeds of which are reser- ved for such purposes .
Rs .
Total of Item No. 6
Rs .
7. Gross profits for purposes ofbonus (Item No. 5 minus Item No. 6)
Explanation . In sub- item (b) of item 3, " approved gratuitv fund " has the same meaning assigned to it in clause (5) of Section 2 of the Income- tax Act.
Foot-notes-
(1) If , and to the extent , charged to Profit and Loss Account .
(2) If, and to the extent , credited to Profit and Loss Account
(3) In the proportion of Indian Gross Profit ( Item No 7) to Total World Gross Profit (as per consolidated Profit and Loss Ac-
count, adjusted as in Item No 2 above only ) ' .
18 In the principal Act, the Second Schedule shall be renumbered as Amend- the Third Schedule and in that Schedule as so renumbered ,- ment of the
, Second ' Schedule .
(a) in column (2) , against Item No 1, for the word " company, " the words "company , other than a banking company " shall be substi- tuted;
THE GAZETTE OF INDIA EXTRAORDINARY
[PART II-- 330
(b) after Item No. 1 and the entries relating thereto , the following item and entries shall be inserted , namely
(2)
(3)
(1)
"2. Banking company
(1) The dividends payable on its preference share capital for the accounting year calculated at the rate at which such dividends are payable ;
(1) 7.5 per cent . of its paid up equity share capital as at the commencement of the accounting year ;
(ii) 5 per cent . of its reserves shown in its balar e - sheet as at the commencement of the accounting year , including any profit carried forward from the pre- vious accounting year;
(iv) any sm which , in respect of the accousting year , is transferred by it-
(4) to a reserve fund under sub- section ( 1 ) of section 17 of the Banking Regulation Act, 1949 ; or 10 of 1949 .
(b) to any reserves in India in pur- suance of any direction or advice given by the Reserve Bank of India,
whichever is higher :
Provided that where the banking company is a foreign company within the meaning of section 591 of the Companies Act, 1956 48 of 1956. theamount tobe deducted under this, Item shall be the aggregate of-
(i) the dividends payable to its preference shareholders for the accounting year at the rate at which such dividends are payable on such amount as bears the same proportion to its total preference share capital as its total working funds in India bear to its total world working funds;
( ii) 7 5 per cent . of such amount as bears the same proportion to its total paid up equity share capital as its total working funds in India bear to its total world working funds ;
(iii) 5 per cent . of such amount as bears the same proportion to its total disclosed reserves as its total working funds in India bear to its total world working funds;
SEC . 1 ]
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331
(1)
(3)
10 of1949 .
(iv) any sum which, in respect of the ac- counting year, is deposited by it with the Reserve Bank of India under sub- clause (ii) of clause (b ) of sub - section ( 2) of section 11 of the Banking Regulation Act, 1949, not exceeding the amount required under the aforesaid provision to be so deposited.";
(c) in the Explanation, for the figures, brackets and word " 1 ( iii) and 3 ( ii )" the figures , brackets and word " 1 ( iii ) , 2 ( iii ) and 3 ( ii) " shall be substituted .
19. In the principal Act, the Third Schedule shall be renumbered as the Fourth Schedule .
Amend- ment of the Third Schedule
N. SANJIVA REDDY ,
President.
K. K SUNDARAM, Secy to the Govt . of India .
PRINTED BY THE GENERAL MANAGER , GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI AND PUBLISHED BY THE CONTROLEER OF PUBLICATIONS , DELHI , 1977