रजिस्ट्री सं ० डी-(डी) -72
REGISTERED No. D- (D) -72
CEMA RAL SECRETARIA:
MC J INDIA .
भारत का राजपत्र The Gazette of India
असाधारण
EXTRAORDINARY
भाग II-खण्ड 1
PART II-Section 1
प्राधिकार से प्रकाशित
PUBLISHED BY AUTHORITY
सं० 70]
नई दिल्ली, शनिवार, दिसम्बर 24 , 1977 /पौष 3, 1899
No. 70] NEW DELHI , SATURDAY, DECEMBER 3 , 1977 / PAUSA 3, 1899
इस भाग में भिन्न पृष्ठ संख्या दी 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 24th December, 1977 / Pausa 3, 1899 ( Saka)
The following Act of Parliament received the assent of the Presi- dent on the 24th December , 1977 , and is hereby published for general information : -
THE PAYMENT OF BONUS ( AMENDMENT) ACT, 1977
NO . 43 OF 1977
[24th December , 1977 ]
An Act further to amend the Payment of Bonus Act , 196 .
BE it enacted by Parliament in the Twenty - eighth Year of the Republic of India as follows : -
1. ( 1) This Act may be called the Payment of Bonus (Amendment) Act, 1977 .
Short title and com- mence- ment .
(2) It shall be deemed to have come into force on the 3rd day of September , 1977 .
2. The Payment of Bonus Act , 1965 (hereinafter referred to as the principal Act ) shall ,-
(a) in relation to a factory or other establishment to which the principal Act applies immediately before the commencement of this Act; and
Act21 of 1965 to have modified effect for a parti- cular period.
(b) in relation to a banking company and the Industrial Recon- struction Corporation of India to which the principal Act applies on and from such commencement by virtue of this Act ,
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 20 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.
(479 ) THE GAZETTE OF INDIA EXTRAORDINARY [PART II- 480
Substitu- tion of long title.
3. In the principal Act, for the long title , the following long title shall be substituted , namely :-
"An Act to provide for the payment of bonus to persons em- ployed in certain establishments and for matters connected there- with "
Amend- ment of section 2
4. In section 2 of the principal Act , în 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-
Computa- tion of gross profits .
(a) in the case of a banking company , be calculated in the manner specified in the First Schedule,
(b ) in any other case , be calculated in the manner speci- fied in the Second Schedule . " .
6. In section 6 of the principal Act ,--
Amend- ment of section 6 .
(a) in clause ( b ) , for the words " development rebate or de- velopment allowance " , the words " development rebate or invest- ment allowance or development allowance" shall be substituted;
(b) in clause ( d ) , for the words " Second Schedule " , the words "Third Schedule " shall be substituted.
Amend- ment of section 7
7. In section 7 of the principal Act , in clause ( e) , for the brackets and words " ( other than development rebate or development allowance ) " , the brackets and words " ( other than development rebate or investment allowance or development allowance) " shall be substituted.
8. In section10 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) regarding the payment of minimum bonus , but subject to the other provisions of this Act , every employer shall be bound to pay to every employce a minimum bonus which shall be 833 per cent . of the salary or wage earned by the employee during the accounting year or one hundred rupecs , whichever is higher , whether or not the employer has any allocable sur- plus in the accounting year
Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year , the pro- visions 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 .
Amend- ment of section 15
9. In section 15 of the principal Act , for the words " Third Schedule " wherever they occur, the words " Fourth Schedule" shall be substituted.
SEC . 1 ]
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481
10. In section 16 of the principal Act , in sub - section ( 1B ) , for the words " Third Schedule " at both the places where they occur, the words "Fourth Schedule " shall be substituted .
Amend- ment of section 16.
11. 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,
Amend- ment of section 21.
12. In section 23 of the principal Act , in sub - section ( 1) , for the word and figures " section 25 " , the words and figures " sections 24 and 25" shall be substituted .
Amend- ment of section 23.
13. After section 23 of the principal Act , the following section shall be inserted , namely :--
Insertion of new section 24.
Audited accounts of bank- ing com- panies not to be question- " 24. ( 1 ) Where any dispute of the nature specified in section 22 between an employer , being a banking company , and its emplo- yees has been referred to the said authority under that section and during the course of proceedings the accounts of the banking com- pany duly audited are produced before it, the said authority shall not permit any trade union or employees to question the correct- ness of such accounts , but the trade union or the employees may be ed. permitted to 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 bank- ing company is not compelled to furnish under the provisions section 34A of the Banking Regulation Act, 1949.". of
14 In section 27 of the principal Act , after sub - section (4) , the following sub - section shall be inserted , namely:-
Amend- ment of section 27.
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." .
Amend- ment of section 31A.
15. In section 31A of the principal Act , in the proviso , for the words "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 " .
16. In section 32 of the principal Act,-
(a) clause ( vii ) shall be omitted;
Amend- ment of section 32.
(b) in clause ( ix ) ,-
(i) sub -clause (ff ) shall be omitted;
THE GAZETTE OF INDIA EXTRAORDINARY [PART II- 482
( ii ) in sub - clause ( g) , after the words " financial institution" , the brackets and words " ( other than a banking company) " shall be inserted .
17. For section 34 of the principal Act , the following sections shall be substituted , namely :-
Substitu- tion of new sec- tions 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 un- der this Act :
Provided that no such agreement shall have effect unless it is en- tered into with the previous approval of the appropriate Govern- ment :
Employ- ees and employers not to be precluded from entering 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 dur- ing the accounting year if the employer has no allocable surplus in the accounting year or the amount of such allocable surplus is only so much that, but for the provisions of sub - section (2A) of section 10, it would entitle the employees only to receive amount of bonus which is less than the aforesaid percentage ; or an
(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 pro- visions of this Act shall have effect notwithstanding anything in- consistent therewith contained in any other law for the time being in force or in the terms of any award , agreement, settlement or con- tract of service ." .
Effect of laws and agree- ments in- consistent with the Act.
18. 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
( i) 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/Develop- ment allowance reserve." shall be substituted;
THE GAZETTE OF INDIA EXTRAORDINARY
SEC . 11
483
(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 .
Remarks Particulars
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.
See foot- (c) Development Rebate Reserve .
note ( 1)
See foot- (d) Any other reserves .
note ( 1)
Rs .
Total of Item No. 2
3. Add back also :
See foot- note (1)
(a) Bonus paid to employees , in respect of previous accounting years .
or (b) The amount debited in res- pect of gratuity paid payable to employees in excess of the aggregate of-
(i) the amount, if any, paid to, or provided for pay- ment to , an approved gratuity fund; and
(11) the amount actually paid to employees on their retirement or on o 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 taxetion is shown in the Profit and Loss Account and the provision n.ade for taxes on Income is shown , the actual provision for texes on income shall be deducted from the profit .
[PART II-
THE GAZETTE OF INDIA EXTRAORDINARY
484
Remarks
Particulars
Irem No.
Amount of
sub - items
Amount of main items
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 of 1949
(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 (ifany) credited directly to published or disclosed re- serves , 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) ;
(it) profits of, and receipts relat- ing to, any business situated outside India;
(n) income of foreign banking companies from invest- ments outside India .
Rs .
Net total of Item No. 4
5. Total of Item Nos . 1 , 2 , 3 and 4. Rs .
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 allowed 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 invest- ments outside India .
(d) Expenditure or losses ( if any) debited directly to publi- shed or disclosed reserves , other than-
(i) capital expenditure and capital losses (other than losses on sale of capital assets on which depre- ciation has not been allowed for income -tax) ;
(11) losses of any business situated outside India .
THE GAZETTE OF INDIA EXTRAORDINARY
SEC. 1 ]
485
Remarks
Particulars
Amount of main items
Amount of
sub- items
Item No.
Rs .
Rs.
See foot- note (3)
(e) In the case of foreign bank- ing companies proportion- ate administrative ( over- head) expenses of Head Office allocable to Indian business .
Sec foot- note (2)
(f) Refund of any excess direct tax paid for previous ac- counting years and excess provision, if any , of previ- ous accounting years rela- ting to bonus , depreciation , or development rebate, if written back .
See foot- note (2)
(g) Cash subsidy , if any , given by the Government or by any body corporate estab- lished by any law for the time being in forceorce or by any other agency through budgetary grants , whether given directly or through any agency for specified purposes and the proceeds of which are reserved for such purposes .
Total of Item No. 6
Rs.
Rs .
7. Gross profits for purposes of bonus (Item No. 5 minus Item No. 6)
Explanation . In sub - item (b) of item 3 , " approved gratuity fund " has the same meaning assigned to it in clause (5) of section 2 of the Income- tax Act .
Foot-notes-
(1) If, and t th extent , charged to Profit and Loss Account .
(2) If, and to the exten' , credited to Profit and Loss Account .
(3) In the proportion of In lian Gross Profit ( Irem N. 7) 10 Total World Gross Profit (as per Consolidated Profit and Loss Account , adjusted as in Item No. 2 above only).
19. In the principal Act , the Second Schedule shall be renumbered as the Third Schedule and in that Schedule as so renumbered ,
Amend- 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 substituted;
(b) after Item No. 1 and the entries relating thereto , the following item and entries shall be inserted, namely :-
(2)
(1)
(3)
" 2. Banking company
(i) The dividends payable on its preference share capital for the accounting year calculated at the rate at which such dividends are payable ;
[PART 11-
THE GAZETTE OF INDIA EXTRAORDINARY
486
(2)
(3)
(1)
(ii) 7 5 per cent. of its paid up equity share capital as at the commencement of the accounting year ;
(iii) 5 per cent , of its reserves shown in its balance-sheet as at the commencement of the accounting year , including any profits carried forward from the previous accounting year ;
(12) any sum which , in respect of the accounting year, is transferred by it-
10 of 1949 .
(a) to a reserve fund under sub - section (1) of section 17 of the Banking Regu- lation Act, 1949 ; or
(b) to any reserves in India in pur- suance of any direction or advice given by the Reserve Bank of India,
whichever is higher :
1 of 1956 .
Provided that where the banking company is a foreign company within the meaning of section 591 of the Companies Act, 1956 , the amount to be deducted under this Item shall be the aggregate of-
(1) the dividends pay- able to eto its preference shareholders for the accounting year at the rate at which such dividends are payable amount as on such bears the same pro- portion to preference its total share capital as its total working funds in India bear to its total world working funds ;
SEC 1 ]
THE GAZETTE OF INDIA EXTRAORDINARY
487
(3)
(1)
(2)
(1) 75 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;
10 of 1949.
(iv) any sum which, in respect of the accounting year, is deposited by it with the Reserve Bank of India under sub- clause ( 1) of clause ( b) of sub- section (2) of section II 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 ( n ) " , the figures brackets and word " 1 ( in ) , 2 ( ni ) and 3 ( ii ) " shall be substituted .
20. In the principal Act , the Third Schedule shall be renumbered as the Fourth Schedule .
Amend- ment of the Third Schedule
9 of 1977.
21 ( 1 ) The Payment of Bonus (Amendment ) Ordinance, 1977 is hereby repealed
Repeal and saving.
(2 ) Notwithstanding such repeal , anything done or any action taken under the principal Act , by virtue of the amendments thereto made by the said Ordinance , shall be deemed to have been done or taken under the principal Act by virtue of the corresponding amendments thereto made by this Act
S. HARIHARA IYER ,
It Secy , to the Govt . of India
PRINTED BY THE GENERAL MANAGER , GOVERNMENT OF INDIA PRESS , MINTO ROAD, NEW DELHI AND PUBLISHED BY THE CONTROLLER OF PURIICATIONS , DELHI 1977