• J. MEHTA & Company
  • J. MEHTA & Company
  • J. MEHTA & Company
  • J. MEHTA & Company
  • J. MEHTA & Company

Payment Acts

The Payment Of Bonus Act

Applicability of Act

Every factory wherein 10 or more persons are employed with the aid of power or An establishment In which 20 or more persons are employed without the aid of power on any day during an accounting year.

Sec. 1


Establishment includes departments, undertakings and branches, etc.

Computation of available surplus

  • Income tax and direct taxes as payable.
  • Depreciation as per section 32 of Income Tax Act.
  • Development rebate, investment or development allowance.

Sec. 5

Set-off and Set-on

As per Schedule IV.

Sec. 15

Submission of Return

In Form D to the inspector within 30 days of the expiry of time limit under Section 19.
Rule 5

Payment of Minimum Bonus

8.33% of the salary or Rs.100 (on completion of 5 years after 1st Accounting year even if there is no profit).

Sec. 10

Time Limit for Payment of Bonus

Within 8 months from the close of accounting year.

Sec. 19

Act not applicable to certain employees of LIC. General Insurance, Dock Yards, Red Cross, Universities* Educational Institutions, Chambers of Commerce, Social Welfare Institutions. Bulking Contractors, etc.
Sec. 32

Separate establishment

I profit loss accounts are prepared and mainland in respect of any such department or undertaking or branch,then such department or undertaking or branch is treated as a separate establishment
Sec. 3


For contravention of any provision of the Act or the Rules: Upto 6 months or with fine upto Rs. 1000.
Sec. 28

The Payment Of Gratuity Act, 1972

Payment Of Gratuity

Applicability of Act

Every factory, mine, oilfield, plantation, port, railways, company, shop, establishment or educational institutions employing 10 or more persons

Sec. 1

Wages for Calculation

@15 days' wages for every completed year as if the month comprises of 26 days at the last drawn wages

Sec. 2(s)

Calculation Place-rated employee

@ 15 days' wages for every completed year on an average of 3 months' wages

Sec. 4

Calculation Seasonal employee

@ 7 days' wages for every completed year of service

Sec. 4


All employees Irrespective of status or salary
Sec. 2(e)


On completion of five years' service except in case of death or disablement
Sec. 2(e)


To be obtained by employer after expiry of one year's service, in Form F

Sec. 6 Rule 6

Qualifying period

On rendering of 5 years' service, either termination, resignation or retirement

Sec. 2(e)


  • Imprisonment for 6 months or fine upto Rs.10,000 for avoiding to make payment by making false statement or representation
  • Imprisonment not less than 3 months and upto one year with fine on default in complying with the provisions of Act or Rules.

Sec. 9

The Payment Of Wages Act, 1936

Payment Of Wages Act

Object of the Act

To regulate the payment of wages of certain classes of employed persons.

Applicability of Act

  • Factory
  • Industrial Establishment
  • Tramway service or motor transport service engaged in carrying passengers or goods or both by road for hire or reward
  • Air transport service
  • Dock, Wharf or Jetty
  • Inland vessel, mechanically propelled
  • Mine, quarry or oil-field
  • Plantation
  • Workshop or other establishment etc.
Coverage of Employees

Drawing average wage upto Rs 6500 per month.

Deduction for services rendered

When accommodation amenity or service has been accepted by the employer.

Sec. 11

Fines as prescribed by
  • Not to be imposed unless the employer is given an opportunity to show cause
  • To record in the register

Sec. 8

Deduction for absence from duties for unauthorized absence

Absence for whole or any part of the day

  • If ten or more persons absent without reasonable cause, deduction of wages upto 8 days

Sec. 9

On contravention of S. 5 (except sub-sec.4), S 7, S.8 (except sub-sec.8), S.9, S.10 (except sub-sec. 2) and Sees. 11 to 13 Fine not less than Rs. 1000 which may extend to Rs.5000. On subsequent conviction fine not less than Rs.5000, may extend to Rs.10,000, On contravention of S.4, S 5(4), S,6, S.8(8), S.10{2) or S.25 fine not less than Rs.1000-may extend to Rs.5000. On subsequent conviction fine not less than Rs.5000-may extend to Rs. 10,000.
  • For failing to maintain registers or records
  • Wilfully refusing or without lawful excuse neglecting to furnish information or return
  • Wilfully furnishing or causing to be furnished any information or return which he knows to be false
  • Refusing to answer or wilfully giving a false answer to any question necessary for obtaining any information required to be furnished under this Act.
  • Fine which shall not be less than Rs.1000 but may extend to Rs.5000 - On record conviction fine not less than Rs.5000. may extend to Rs.10,000
  • Second or subsequent conviction, fine not less than Rs.5000 but may extend to Rs.10,000.
  • Wilfully obstructing an Inspector in the discharge of his duties under this Act
  • Refusing or wilfully neglecting to afford an Inspector any reasonable facility for making any entry, inspection etc.
  • Wilfully refusing to produce on the demand of an Inspector any register or other document kept in pursuance of this Act; or preventing any person for appearance etc.
Fine not less than Rs.1000 extendable upto Rs.5000 - On subsequent conviction fine not less than Rs 5000 - may extend to Rs.10,000.
  • On conviction for any offence and again guilty of contravention of same provision
  • Failing or neglecting to pay wages to any employee.
  • Imprisonment not less than one month extendable upto six months and fine not less than Rs.2000 extendable upto Rs. 15000.
  • Additional fine upto Rs. 100 for each day.