Information Under 217(2A)
This query is : Resolved
09 October 2007
Sec.217 (2A) Requires information regarding the employees to be given in director's report. The clause states to include those employees who are in reciept of Remunartion of Rs.24 lacs p.a or Rs.2lakhs per month. My query is what if i have an employee who is earning 50000 per month, joined my organisation in Feb 07 and got the joining bonus of Rs.3,00,000.Will that be included in the list of employees under sec.217(2A)?
09 October 2007
217 (2A)(a)(ii) explains if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than Rs.2,00,000 /- pm has been prescribed.
As per sec 198 of the said act, the meaning of Remuneration which does not include the joining Bonus.
In your case the aggregate is not crossing Rs.2,00,000/-
So, need not disclose the same.
As per sec 198 of the said act, the meaning of Remuneration which does not include the joining Bonus.
In your case the aggregate is not crossing Rs.2,00,000/-
So, need not disclose the same.
09 October 2007
Please refer to the definition of remuneration as per sec.198 which is an "inclusive definition" and accordingly as per me "joining bonus" will become part of remuneration. Also now as you have raised a different issue what if let us suppose jooining bonus is a part of remuneration, then will ur answer change?
09 October 2007
Obviously. If part of remuneration the disclosure is needed. Pl Let me know the wordings from Sec 198.
10 October 2007
Any expenditure incurred by the company in respect of any obligation or service is a part of remuneration. So if the joining bonus is an obligation of the Company and the aggregate remuneration per menth exceeds Rs. 2 lakhs per month, it has to disclosed.
10 October 2007
Any expenditure incurred by the company in respect of any obligation or service is a part of remuneration. So if the joining bonus is an obligation of the Company and the aggregate remuneration per menth exceeds Rs. 2 lakhs per month, it has to disclosed.
10 October 2007
UNDER 217(2A),ANNUAL LIMIT IS RS. 24 LAKHS.
IF IT IS FOR PART OF A YEAR, THE limit OF RS. 2 LAKHS COUNTS.
HERE WE NEED TO DECIDE WHAT IS REMUNERATION.
REMUNERATION FOR THE PURPOSE OF SEC 217(2A)HAS SAME MEANING AS UNDER SEC 198.
EXPLATION (b) under subsection 4 of section 198 says any expenditure incurred by the company in providing any other benefit or amenity free of charge......
Expln.(c) under same sub sec, says any exp. incurred by the company in respect of any obligation or service......
so one may argue that JOINING BONUS IS INCLUDIBLE UNDER ANY OF THESE TWO ABOVE EXPLANATIONS.
SO THE SAFE COURSE FOR YOU IS TO INCLUDE THE NAME OF THE EMPLOYEE AND THE TOTAL PAID TO THE EMPLOYEE UNDER LIST OF EMPLOYEES SERVED FOR PART OF THE YEAR .
R.V.RAO
IF IT IS FOR PART OF A YEAR, THE limit OF RS. 2 LAKHS COUNTS.
HERE WE NEED TO DECIDE WHAT IS REMUNERATION.
REMUNERATION FOR THE PURPOSE OF SEC 217(2A)HAS SAME MEANING AS UNDER SEC 198.
EXPLATION (b) under subsection 4 of section 198 says any expenditure incurred by the company in providing any other benefit or amenity free of charge......
Expln.(c) under same sub sec, says any exp. incurred by the company in respect of any obligation or service......
so one may argue that JOINING BONUS IS INCLUDIBLE UNDER ANY OF THESE TWO ABOVE EXPLANATIONS.
SO THE SAFE COURSE FOR YOU IS TO INCLUDE THE NAME OF THE EMPLOYEE AND THE TOTAL PAID TO THE EMPLOYEE UNDER LIST OF EMPLOYEES SERVED FOR PART OF THE YEAR .
R.V.RAO
10 October 2007
Thanks Mr. Rao Sir,for your information
10 October 2007
The query is still where it is. I agree that joining bonus should be part of Remuneration. What i am asking is what is the relevance of the word "at the rate of" in sec 217(2A). Because when i will pay amn employee at the rate of Rs.40000pm for 2 months because he joined in Feb07 and he got the joining bonus of say Rs.250,000. Whether in this situation just because he got bonus of amount above Rs.200,000 he will get included? Whereas his "rate of remuneartion" is 40000pm.?
10 October 2007
DEAR SRI ROHIT,
SUBCLAUSE i and ii under clause (a) of sub sec. 2A OF 217 REFER - Aggregate AMOUNT IN sub CLAUSE i and rate in sub CLAUSE ii. pl. see the diff.
the rate under clause ii is a limit/yardstick to measure remuneration p.m which the law put @ Rs. 2 lakhs per month for any part of the year .
Now that we all agree , that the word remuneration included joining bonus of Rs. 3 lakhs added to salary for 2 months(50kx2) MAKES A TOTAL of Rs. 4.00 lakhs for 2 months or rate referred in sub clause ii of Rs. 2 lakhs per month.
For employees who serve for part of an year , what we need to to do is first to define what all includible under remuneration .divide same by the no. of months .see the rate p.m .if it meets Rs. 2 lakhs limit ,it needs to be stated in the list of employees for part of the year .otherwise no.
R.V.RAO
SUBCLAUSE i and ii under clause (a) of sub sec. 2A OF 217 REFER - Aggregate AMOUNT IN sub CLAUSE i and rate in sub CLAUSE ii. pl. see the diff.
the rate under clause ii is a limit/yardstick to measure remuneration p.m which the law put @ Rs. 2 lakhs per month for any part of the year .
Now that we all agree , that the word remuneration included joining bonus of Rs. 3 lakhs added to salary for 2 months(50kx2) MAKES A TOTAL of Rs. 4.00 lakhs for 2 months or rate referred in sub clause ii of Rs. 2 lakhs per month.
For employees who serve for part of an year , what we need to to do is first to define what all includible under remuneration .divide same by the no. of months .see the rate p.m .if it meets Rs. 2 lakhs limit ,it needs to be stated in the list of employees for part of the year .otherwise no.
R.V.RAO
11 October 2007
Thanks for your calculus answer mr.Rao sir
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