bonus piad to employee

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tarunjjain

tarunjjain (Querist)
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07 October 2009 ANY RESTRICTION ON BONUS PAID TO EMPLOYEE UNDER INCOME TAX AND COMPANIES ACT.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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07 October 2009 Minimum Bonus to be paid to employees is 8.33% and maximum bonus that can be paid is 20% of their salaries earned during the year.

If you pay extra over and above the above limit it will be termed as exgratia. To a maximum of another 10% you can pay.

There is no restriction but the officer will disallow the same under income tax act and under companies act the directors are misusing their powers.