HiI have some issues in understanding the section 16 (1A) of the Payment of Bonus Act. Could you ex…
Hi
I have some issues in understanding the section 16 (1A) of the Payment of Bonus Act. Could you explain it to me?
Chiranjibi Chapagain Aug. 03, 2018
Let's go with logic here. The point is not about whether it is the first accounting year or the second accounting year.
Let's understand with an example:
- Let's say a company was incorporated on 1st June, 2010.
- The company is only involved in increasing wealth and investing in assets until July 2013.
- The company finally started selling goods in August 2013.
The question is "When does the company start paying bonus?"
Just see when it starts selling the goods, (August 2013) and take the next 5 accounting years (Apr-2014 to Mar 2018). Now see if there are profits in any of these years.
The company has to pay bonus for every year from Apr-2014 to Mar 2018 but only where it has profits. Company is not obligated to pay bonus out of losses.
