Labour Code Advisor

Section 1. Short title, extent and application.

(1) This Act may be called the Payment of Bonus Act, 1965.

(2) It extends to the whole of India 3***.

(3) Save as otherwise provided in this Act, it shall apply to—

(a) every factory; and

(b) every other establishment in which twenty or more persons are employed on any day during an accounting year:

4[Provided that the appropriate Government may, after giving not less than two months’ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act with effect from such accounting year as may be specified in the notification, to any establishment or class of establishments [including an establishment being a factory within the meaning of sub-clause (ii) of clause (m) of section 2 of the Factories Act, 1948 (63 of 1948)] employing such number of persons less than twenty as may be specified in the notification; so, however, that the number of persons so specified shall in no case be less than ten.]

(4) Save as otherwise provided in this Act, the provisions of this Act shall, in relation to a factory or other establishment to which this Act applies, have effect in respect of the accounting year commencing on any day in the year 1964 and in respect of every subsequent accounting year:

5[Provided that in relation to the State of Jammu and Kashmir*, the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year shall be construed as reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year:]

6[Provided further that when the provisions of this Act have been made applicable to any establishment or class of establishments by the issue of a notification under the proviso to sub-section (3), the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year or, as the case may be, the reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year, shall, in relation to such establishment or class of establishments, be construed as a reference to the accounting year specified in such notification and every subsequent accounting year.]

(5) An establishment to which this Act applies 7*** shall continue to be governed by this Act notwithstanding that the number of person employed therein falls below twenty 8[or, as the case may be, the number specified in the notification issued under the proviso to sub-section (3)].

View Act Footnotes

Note: In the legacy archives, footnotes are grouped by original PDF page numbers rather than by section.

Page 3

  • 1. The Act has been extended to Goa, Daman and Diu by Act 6 of 1977, s. 2 and the Schedule.
  • 2. Subs. by Act 43 of 1977, s. 3, for the long title (w.e.f. 3-9-1977).
  • 3. The words “except the State of Jammu and Kashmir” omitted by Act 51 of 1970, s. 2 and the Schedule (w.e.f. 1-9-1971).
  • 4. The proviso added by Act 23 of 1976, s. 3 (w.e.f. 25-9-1975).
  • 5. The proviso added by Act 51 of 1970, s. 2 and the Schedule (w.e.f. 1-9-1971).
  • 6. The proviso inserted by Act 23 of 1976, s. 3 (w.e.f. 25-9-1975).
  • 7. The words, brackets, letter and figure “under clause (b) of sub-section (3)” omitted by s. 3, ibid. (w.e.f. 25-9-1975).
  • 8. Certain words, brackets and figure added by s. 3, ibid. (w.e.f. 25-9-1975).*. Vide notification No. S.O. 3912(E), dated 30th October, 2019, this Act is made applicable to the Union territory of Jammuand Kashmir and the Union territory of Ladakh.

Page 4

  • 1. Ins. by Act 66 of 1980, s. 2 (w.e.f. 21-8-1980).
  • 2. The words, brackets and figures “and includes any amount treated as such under sub-section (2) of section 34” omitted byAct 23 of 1976, s. 4 (w.e.f. 25-9-1975).
  • 3. Ins. by s. 4, ibid. (w.e.f. 25-9-1975).

Page 5

  • 1. Subs. by Act 6 of 2016, s. 2, for “ten thousand rupees” (w.e.f. 1-4-2014).

Page 6

  • 1. Subs. by Act 66 of 1980, s. 3, for section 4 (w.e.f. 21-8-1980).

Page 7

  • 1. The proviso added by Act 8 of 1969, s. 2 (w.e.f. 26-3-1965).
  • 2. Subs. by Act 66 of 1980, s. 4, for “development rebate or development allowance” (w.e.f. 21-8-1980).
  • 3. Subs. by s. 4, ibid., for “Second Schedule” (w.e.f. 21-8-1980).
  • 4. Subs. by Act 8 of 1969, s. 3, for “For the purpose of clause (c) of section 6, any direct tax payable by the employer”(w.e.f. 26-3-1965).

Page 8

  • 1. Subs. by Act 66 of 1980, s. 5, for “(other than development rebate or development allowance)” (w.e.f. 21-8-1980).
  • 2. Subs. by s. 6, ibid., for section 10 (w.e.f. 21-8-1980).
  • 3. Ins. by Act 67 of 1985, s. 3 (w.e.f. 7-11-1985).
  • 4. Subs. by Act 6 of 2016, s. 3, for “three thousand and five hundred rupees” (w.e.f. 1-4-2014).

Page 9

  • 1. Subs. by Act 6 of 2016, s. 3, for “three thousand and five hundred rupees” (w.e.f. 1-4-2014).
  • 2. The Explanation inserted by s. 3, ibid. (w.e.f. 1-4-2014).
  • 3. Subs. by Act 66 of 1980, s. 8, for section 13 (w.e.f. 21-8-1980).
  • 4. Subs. by s. 9, ibid., for section 15 (w.e.f. 21-8-1980).
  • 5. Subs. by Act 23 of 1976, s. 12, for sub-section (1) and the Explanation thereto (w.e.f. 25-9-1975).

Page 10

  • 1. Subs. by Act 66 of 1980, s. 10, for “Third Schedule” (w.e.f. 21-8-1980).
  • 2. Subs. by Act 23 of 1976, s. 12, for “sub-section (1)” (w.e.f. 25-9-1975).

Page 11

  • 1. Subs. by Act 23 of 1976, s. 13, for “(1) Subject to this provisions of this section, all amounts” (w.e.f. 25-9-1975).
  • 2. Sub-sections (2) to (7) omitted by s. 13, ibid. (w.e.f. 25-9-1975).
  • 3. Sub-section (8) omitted by Act 55 of 1973, s. 2 (w.e.f. 1-9-1973).
  • 4. Section 20 renumbered as sub-section (1) thereof by Act 66 of 1980, s. 11 (w.e.f. 21-8-1980).
  • 5. Ins. by s. 11, ibid. (w.e.f. 21-8-1980).

Page 12

  • 1. Subs. by Act 66 of 1980, s. 12, for “sections 22, 23 and 25” (w.e.f. 21-8-1980).
  • 2. Subs. by Act 23 of 1976, s. 16, for “and in sections 24 and 25” (w.e.f. 25-9-1975).
  • 3. Subs. by Act 66 of 1980, s. 13, for “section 25” (w.e.f. 21-8-1980).
  • 4. Ins. by s. 14, ibid. (w.e.f. 21-8-1980).

Page 13

  • 1. Ins. by Act 66 of 1980, s. 15 (w.e.f. 21-8-1980).

Page 14

  • 1. Ins. by Act 66 of 1980, s. 16 (w.e.f. 21-8-1980).
  • 2. Ins. by Act 23 of 1976, s. 19 (w.e.f. 25-9-1975).
  • 3. Ins. by Act 66 of 1980, s. 17 (w.e.f. 21-8-1980).

Page 15

  • 1. Subs. by Act 66 of 1980, s. 17, for “Provided that” (w.e.f. 21-7-1980).
  • 2. The words in brackets shall stand omitted (date to be notified) by Act 62 of 1968, s. 41.
  • 3. Clause (vi) omitted by Act 45 of 2007, s. 4 (w.e.f. 1-4-2006).
  • 4. Clause (vii) omitted by Act 66 of 1980, s. 18 (w.e.f. 21-7-1980).
  • 5. Subs. by Act 61 of 1981, s. 61 and the Second Schedule, for sub-clause (d) (w.e.f. 2-7-1982).
  • 6. Ins. by Act 39 of 1989, s. 53 and the Second Schedule (w.e.f. 7-3-1990).
  • 7. Ins. by Act 53 of 1987, s. 56 and the Second Schedule (w.e.f. 9-7-1988).

Page 16

  • 1. Ins. by Act 66 of 1980, s. 18 (w.e.f. 21-8-1980).
  • 2. Clause (x) omitted by Act 23 of 1976, s. 20 (w.e.f. 25-9-1975).
  • 3. Subs. by s. 22, ibid., for section 34 (w.e.f. 25-9-1975).
  • 4. Subs. by Act 6 of 2016, s. 4, for sub-section (1) (w.e.f. 1-4-2014).
  • 5. Subs. by Act 23 of 1976, s. 24, for “or in two successive sessions” (w.e.f. 25-9-1975).
  • 6. Subs. by s. 24, ibid., for “in which it is so laid or the session immediately following” (w.e.f. 25-9-1975).

Page 18

  • 1. Ins. by Act 66 of 1980, s. 19 (w.e.f. 21-8-1980).
  • 2. Where the profit subject to taxation is shown in the Profit and Loss Account and the provision made for taxes on incomeis shown, the actual provision for taxes on income shall be deducted from the profit.

Page 22

  • 1. The First Schedule renumbered as the Second Schedule by Act 66 of 1980, s. 19 (w.e.f. 21-8-1980).
  • 2. Subs. by s. 19, ibid., for “(See section 4)” (w.e.f. 21-8-1980).
  • 3. Subs. by s. 19, ibid., for entry (d) (w.e.f. 21-8-1980).
  • 4. Ins. by Act 23 of 1976, s. 26 (w.e.f. 25-9-1975).

Page 25

  • 1. Subs. by Act 23 of 1976, s. 26, for sub-item (g) (w.e.f. 25-9-1975).
  • 2. Explanation inserted by s. 26, ibid. (w.e.f. 25-9-1975).

Page 26

  • 1. The Second Schedule renumbered as the Third Schedule by Act 66 of 1980, s. 20 (w.e.f. 21-8-1980).
  • 2. Subs. by s. 20, ibid., for “Company” (w.e.f. 21-8-1980).
  • 3. Ins. by s. 20, ibid. (w.e.f. 21-8-1980).

Page 29

  • 1. Subs. by Act 66 of 1980, s. 20, for “1(iii) and 3(ii)” (w.e.f. 21-8-1980).

Page 30

  • 1. Subs. by Act 66 of 1980, s. 21, for the Third Schedule (w.e.f. 21-8-1980).
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