Reply To: Annual Bonus for Employees and Income Tax Calculation with Bonus

[Steve Alex]

#22280

Dear Dwane,

The payment of bonus act is very clear. You are required to pay bonus to all employees within 8 months from the end of the financial year. There isn’t any specific provisions for separated employees. So the same rule applies to them also. Therefore you are free to give it along with all the others within 8 months. Most companies give it along with full and final because otherwise they have to find the employee and give him the money later. If you do not give it to him then it must be noted in the unpaid bonus register and after 3 years deposited in the labour welfare fund.
Another thing to be noted is that you are talking of Diwali bonus not statutory bonus. If you are paying customary bonus (like at Diwali or Dasara) then you can adjust that at the time of annual bonus. It means in effect you paid bonus during the year and not at the end of the year and therefore you don’t need to pay anything more now (there are circumstances you need to verify). However it’s actually unfair because you probably didn’t pay to those who are newly joined