Payment of Bonus
Section 26. Eligibility for bonus, etc.
26(1).
Every employee is entitled to an annual minimum bonus if:
Their monthly wages do not exceed the limit notified by the appropriate Government.
They have worked at least 30 days in the accounting year.
The employer must pay a minimum bonus at 8.33% of the total wages earned, or ₹100, whichever is higher.
The employer has to pay this minimum bonus even if he has no allocable surplus for that year.
Example:
Assume an employee earns ₹18,000 per month, which is within the wage limit notified by the Government.
He has worked for more than 30 days in the accounting year.
His total wages for the year amount to ₹1,80,000.
Then:
The minimum bonus is calculated at 8.33% of total wages.
8.33% of ₹1,80,000 comes to ₹14,994.
Since ₹14,994 is higher than ₹100, this amount is payable as minimum bonus.
The employer must pay this minimum bonus even if there is no allocable surplus for that year.
26(2).
If an employee’s monthly wages exceed the notified ceiling, then for bonus calculation:
The bonus must be computed on either of the following:
The employee’s wages were equal to the notified wage ceiling.
The minimum wage fixed by the Government.
For the purposes of bonus calculation whichever is higher will be taken into consideration.
This applies to the bonus payable under both 26(1) and 26(3).
Example:
Assume the following:
Employee’s actual monthly wages: ₹25,000
Notified wage ceiling for bonus: ₹7,000
Minimum wage fixed by Government: ₹9,000
Since actual wages exceed the ceiling, actual wages are ignored
Since the higher of ₹7,000 (ceiling) and ₹9,000 (minimum wage) is ₹9,000 the bonus is calculated on ₹9,000.
If bonus rate is 10%, then the bonus payable will be ₹900.
This method applies for bonus under sections 26(1) and 26(3)
26(3).
Bonus When Allocable Surplus Exceeds Minimum Bonus
If, in any accounting year, the allocable surplus is more than the minimum bonus payable under 26(1) then:
The employer must pay bonus proportionate to the employee’s wages for that year.
This higher bonus replaces the minimum bonus.
The bonus cannot exceed 20% of the wages earned by the employee in that year.
Example:
Suppose an employee earns ₹15,000 per month and works for the full year.
His total wages for the year are ₹1,80,000.
The minimum bonus at 8.33% under section 26(1) would be ₹14,994.
In that accounting year, the employer has sufficient allocable surplus to pay bonus at 15%.
Bonus at 15% of ₹1,80,000 comes to ₹27,000.
Since this amount is higher than the minimum bonus, the employee will receive ₹27,000 instead of ₹14,994.
The bonus is proportionate to the wages earned during the year.
The bonus does not exceed the maximum limit of 20% of annual wages.
26(4).
Computation of Allocable Surplus
While calculating the allocable surplus:
Any amount set on or amount set off under Section 36 must be included and it must be applied exactly as required under that section.
26(5).
Bonus Based on Production or Productivity
If employees demand a bonus higher than the minimum bonus, based on Production, or Productivity for the relevant accounting year, then:
Such bonus must be decided by agreement or settlement between employer and employees.
But the total bonus, including the minimum bonus under 26(1), cannot exceed 20% of the employee’s wages for that accounting year.
26(6).
Bonus in the First Five Accounting Years of a New Establishment
For a newly started establishment:
For the first five accounting years after the year in which the employer first begins selling goods or providing services:
The employer is required to pay bonus only for those years in which the establishment actually makes a profit.
For any such profit-making year:
The bonus must be calculated as per the normal provisions of this Code for that accounting year.
However, Section 36 (set-on and set-off) does not apply during these first five years.
So , a new business does not have to pay bonus every year in its initial five-year period.
It has to pay only in the years where it earns profit.
For those profit years, bonus is calculated normally but without adjusting previous years’ surplus or deficits (no set-on / set-off).
26(7).
Bonus Rules for the 6th and 7th Accounting Years of a New Establishment
After a new establishment completes its first five accounting years the 6th and 7th years have special transitional rules.
During the 6th and 7th accounting years, the normal set-on / set-off system under Section 36 starts applying, but with specific modifications:
(i). Sixth Accounting Year
In the 6th year, set-on or set-off must be calculated:
As per the method prescribed by the Central Government.
It must be calculated taking into account the excess or deficit of allocable surplus from the 5th year the 6th year.
So when calculating set-on / set-off for the 6th year, only the surplus or shortage from the 5th and 6th years is considered and not from years 1–4.
Example:
Assume In the 5th year, the employer has extra allocable surplus of ₹2,00,000 after paying maximum bonus.
This extra amount is carried forward (set-on) to the next year.
In the 6th year, the employer has a shortage/deficit of ₹1,50,000 to pay the required bonus.
While calculating bonus for the 6th year, only the extra ₹2,00,000 from the 5th year is used to cover this shortage.
Years 1 to 4 are completely ignored for this calculation.
After adjustment, ₹50,000 remains as excess, which can be carried forward further as per the rules.
(ii). Seventh Accounting Year
In the 7th year, set-on or set-off must be calculated:
As per the method prescribed by the Central Government, and
By taking into account the excess or deficiency of allocable surplus from the 5th year , 6th and the 7th year.
So calculating set-on / set-off for the 7th year, the system expands and the surplus/deficit from three years , 5th, 6th, and 7th mist be taken into consideration.
Example:
In the 5th year, the employer has an excess allocable surplus of ₹1,00,000, which is carried forward as set-on.
In the 6th year, the employer has a shortage of ₹60,000, which is treated as set-off.
In the 7th year, the employer again has an excess allocable surplus of ₹80,000.
While calculating bonus for the 7th year, the surplus or deficit of only these three years (5th, 6th, and 7th) is considered.
The amounts are adjusted together: ₹1,00,000 (5th year excess) + ₹80,000 (7th year excess) − ₹60,000 (6th year deficit).
The net result is a set-on of ₹1,20,000.
Any surplus or deficit from years 1 to 4 is ignored.
26(8).
From the 8th accounting year onwards (counting from the year the establishment first starts selling goods or rendering services):
The normal Section 36 set-on / set-off rules fully apply,
These sections apply exactly the same as they apply to any old or established business.
Explanation 1:
When is an employer considered to have “Derived profit”?
For the purposes of 21(6), an employer is considered to have earned profit in a year only if BOTH these conditions are satisfied:
(a). Depreciation for that year is fully provided
The employer must first claim/record the depreciation allowed under:
Income-tax Act.
Agricultural income-tax law (if applicable).
(b).Past losses + past unclaimed depreciation fully set off
Any carry-forward business losses, or accumulated depreciation from previous years must be:
Fully absorbed from the current year’s profit before he is treated as having “Derived profit.”
So a company is treated as having actual profit only after clearing:
That year's depreciation.
All old losses and depreciation.
Only then does the obligation to pay bonus under the “first five years” rule arise.
Explanation 2: Trial Production and Prospecting Are NOT Considered Sales
For the purposes of 26(6), 26(7), and 26(8):
Trial production sales of a factory, and Prospecting stage of a mine or oil-field are NOT counted as “Sale of goods” or “Production.”
The reason is because these are not commercial operations and they are just testing or exploratory stages.
If a dispute arises , the appropriate government will decide after hearing both sides of the cases.
So , the “clock” for counting the 1st, 2nd, 3rd year, starts only when full commercial operations begin, not when trial runs or prospecting work happens.
26(9).
The provisions in 26(6), 26(7), and 26(8) also apply to new departments / undertakings / branches created by an existing establishment.
So, If a big existing company opens a new factory, new unit, new branch, or new division, that new part is treated like a new business for bonus purposes.
It gets the same benefits and rules:
First 5 years: bonus only if the unit makes a real profit (after depreciation + past losses).
Years 6 and 7: modified set-on/set-off rules.
From year 8: Complete Section 36 rules apply.
The objective is that a new division should not be burdened with high bonus obligations just because the parent company is old and profitable.
Section 27. Proportionate reduction in bonus in certain cases.
If an employee has not worked for all working days in the accounting year then:
The minimum bonus under Section 26(1) shall be reduced proportionately based on the number of days actually worked.
The reduction can be done only if the minimum bonus amount is higher than 8.33% of the wages for the actual days worked.
So , If an employee worked only part of the year, the minimum bonus should also apply only to the part of the year they actually worked.
The employer is not obligated to pay the full-year minimum bonus to someone who worked only some of the days.
Section 28. Computation of number of working days.
For the purpose of calculating proportionate bonus under Section 27, an employee is also treated as having worked on the following days:
(a).
Days when the employee is laid off under:
An agreement.
Standing orders under the Industrial Employment (Standing Orders) Act, 1946.
The Industrial Disputes Act, 1947.
Any other applicable law.
(b).
Days when the employee is on leave with salary or wages.
(c).
Days when the employee is absent due to temporary disablement caused by an accident arising out of and in the course of employment.
(d).
Days when a female employee is on maternity leave with salary or wages during the accounting year.
Section 29. Disqualification for bonus.
An employee shall not be eligible to receive bonus under this Code if he is dismissed from service on any of the following grounds:
(a). Dismissal due to fraud.
(b). Dismissal for riotous or violent behaviour while on the premises of the establishment.
(c). Dismissal for theft, misappropriation, or sabotage of any property of the establishment.
(d). Dismissal following conviction for sexual harassment.
Section 30. Establishments to include departments, undertakings and branches.
30(1)
If an establishment has different departments, undertakings, or branches then:
All these departments , undertakings or branches will be treated as a single establishment for the purposes on computing bonus under this code.
It does not matter if these departments , undertaking or branches are located in one place or in different places.
However, for any accounting year:
If a separate balance sheet and profit & loss account are prepared and maintained for any such department, undertaking, or branch, then:
That department, undertaking, or branch shall be treated as a separate establishment for bonus computation for that accounting year.
Unless it was treated as part of the main establishment for bonus computation immediately before the beginning of that accounting year.
Section 31. Payment of bonus out of allocable surplus.
31(1).
Bonus shall be paid out of the allocable surplus.
Bonus will be paid out of 60% of the available surplus in the case of a banking company.
Bonus will be paid out 67% of the available surplus in the case of any other establishment.
The available surplus shall be calculated in accordance with Section 33.
Example:
Suppose a banking company has an available surplus of ₹10,00,000 for an accounting year.
Allocable surplus = 60% of ₹10,00,000 = ₹6,00,000.
Bonus to employees will be paid out of this ₹6,00,000.
Suppose a non-banking establishment (like a factory or office) has an available surplus of ₹10,00,000 for the same year.
Allocable surplus = 67% of ₹10,00,000 = ₹6,70,000.
Bonus to employees will be paid out of this ₹6,70,000.
In both cases, the available surplus is first calculated as per Section 33, and only the above percentage of it is used for paying bonus.
31(2).
The audited accounts of companies shall generally not be questioned.
31(3).
If there is a dispute regarding the quantum of bonus, then the authority notified by the appropriate Government may:
Require the employer to produce the balance sheet.
However, the authority shall not disclose any information from the balance sheet unless the employer consents.
Section 32. Computation of gross profits.
The law requires the employer to calculate gross profits for each accounting year.
The method of calculating gross profits is not the same for all employers.
(a).
If the employer is a banking company then:
Gross profits must be calculated according to the method prescribed by the Central Government specifically for banks.
(b).
If the employer is any other type of establishment (factory, office, shop) then:
Gross profits must be calculated according to the method prescribed by the Central Government for non-banking establishments.
The employer cannot use any self-chosen method.
The employer must only use the prescribed government method must be followed.
Section 33. Computation of available surplus.
First, the gross profits of the establishment for the accounting year are calculated.
From these gross profits, certain specific deductions are made.
These deductions are the ones listed in Section 34 of the Act.
After subtracting all amounts mentioned in Section 34, the remaining amount is called the available surplus.
This available surplus is the amount used for calculating allocable surplus and paying bonus.
For the first accounting year that starts after the Code comes into force and every accounting year after that:
For these years, the available surplus is not taken as a single figure straightaway.
Instead, the available surplus will be calculated as:
(a). Take the gross profits of the current accounting year and deduct the amounts mentioned in section 34.
(b) Then add an amount equal to the difference between:
(i). The direct tax (calculated as per section 35) on the gross profits of the immediately preceding accounting year, and
(ii). The direct tax (calculated as per section 35) on the gross profits of that preceding year after deducting the bonus paid or payable by the employer to employees under this Code.
The total of (a) and (b) together forms the available surplus for the accounting year.
So essentially in order to calculate the available surplus: ((a) - deductions mentioned in section 34) + (i-ii)
Example:
Assume the gross profits of the current accounting year = ₹10,00,000
Similarly assume the Deductions under section 34 = ₹2,00,000
So, (a) would be = ₹10,00,000 − ₹2,00,000 = ₹8,00,000
Now for (b):
(i). Assume the Direct tax on gross profits of preceding year (₹9,00,000) = ₹2,70,000
(ii). Assume Direct tax on preceding year’s gross profits after deducting bonus (₹8,00,000) = ₹2,40,000
So, (i − ii) = ₹2,70,000 − ₹2,40,000 = ₹30,000.
Finally, the complete available Surplus would be equal to = ₹8,00,000 + ₹30,000 = ₹8,30,000.
Section 34. Sums deductible from gross profits.
The following amounts are called prior charges.
They must be deducted from the gross profits of the accounting year.
(a).
Deduct depreciation that is allowable under section 32(1) of the Income-tax Act or under the Agricultural Income-tax law.
Provided these provisions apply to the employer and he is lawfully exercising it.
(b).
Deduct the direct tax that the employer is liable to pay for that accounting year on his income, profits, and gains.
This deduction is subject to the rules laid down in section 35.
(c).
Deduct any other sums relating to the employer that may be prescribed by the Central Government.
After deducting all amounts under (a), (b), and (c) from gross profits, the remaining amount is used for calculating the available surplus.
Section 35. Calculation of direct tax payable by the employer.
How direct tax is to be calculated for the purposes of this Code
The calculation is subject to the specific rules and conditions laid down below.
The direct tax must be calculated at the tax rates applicable to the employer’s income for that particular year.
These rules apply to any accounting year for which the employer is liable to pay direct tax.
(a).
While calculating such tax, the following components shall not be taken into consideration:
(i).
The losses suffered by the employer in earlier years.
It applies to a previous accounting year, not the current one.
The employer must have actually incurred a loss in that earlier year.
That loss must be legally allowed to be carried forward under the law relating to direct taxes (such as the Income-tax Act).
Only such lawfully carried-forward losses are considered for the purposes of this Code.
Therefore , these losses that are carried forward shall not be taken into consideration while calculating direct tax.
(ii).
Depreciation that could not be fully claimed in earlier years.
Such unclaimed depreciation becomes arrears of depreciation.
The employer must be legally entitled to carry forward this depreciation.
The carry-forward must be permitted under section 32(2) of the Income-tax Act.
These arrears can be added to the depreciation allowance of one or more succeeding accounting years.
These arrears shall not be taken into consideration while calculating direct tax.
(b).
The provisions of section 41 of this Code do not apply to religious or charitable institution.
The religious and charitable institution earns income during the year.
The whole or a part of that income is exempt from tax under the Income-tax Act.
The exempt portion of the income is identified separately from the taxable income.
For the purpose of applying this Code, the institution is treated as if it were a company in respect of that exempt income.
The institution is assumed to be a company in which the public are substantially interested.
The meaning of this assumed status is taken from the Income-tax Act.
This assumed treatment is applied only to the exempt income and only for the purposes of this Code.
(c).
With respect to an employer who is an individual person or a Hindu Undivided Family (HUF):
Given that The employer has an establishment (such as a business or workplace).
The employer earns income from that establishment.
For income-tax calculation, it is assumed that: The income earned from the establishment is the employer’s only income.
Any other personal income of the employer is ignored for this calculation.
Tax payable under the Income-tax Act is calculated only on the establishment’s income.
(d).
The employer earns income that includes profits and gains from export of goods or merchandise outside India.
Under the direct tax laws in force, the employer is allowed a rebate on such export income.
While calculating income for this purpose that rebate is ignored.
So , the export income is taken before giving the rebate.
The tax rebate benefit is not deducted or considered in this calculation.
Example:
An employer earns ₹10,00,000 as total income.
Out of this, ₹4,00,000 is profit from export of goods outside India.
Under the Income-tax law, the employer is entitled to an export rebate of ₹1,00,000 on this export income.
In the normal tax situation, the employer earns ₹4,00,000 as export profit.
The law allows an export rebate of ₹1,00,000 on this income.
Because of the rebate, the export income is reduced to ₹3,00,000 for tax purposes.
Therefore, the employer’s total income is taken as ₹9,00,000, with reduction for the export rebate.
For the purpose of this clause, the calculation is different.
The entire export profit of ₹4,00,000 is taken into account.
The rebate of ₹1,00,000 is ignored completely.
Therefore, the employer’s total income is taken as ₹10,00,000, without any reduction for the export rebate.
(e).
While calculating the direct tax for this purpose, most tax benefits are ignored.
This includes rebates, credits, reliefs, or deductions allowed under any direct tax law, or the annual Finance Act.
Only three tax benefits are allowed to be considered:
Development rebate.
Investment allowance.
Development allowance.
These three are allowed because they are given to encourage industrial development.
All other tax benefits, even if legally allowed under income-tax laws, must be completely ignored for this calculation.
Section 36. Set on and set off of allocable surplus.
36(1).
If, in any accounting year, the allocable surplus exceeds the maximum bonus payable under section 26, then:
This excess is subject to a maximum limit of 20% of the total salary or wages of all employees employed in the establishment during that accounting year.
The excess amount within this limit shall be carried forward.
The carried-forward amount shall be set on in the succeeding accounting year.
If it is not fully utilised in that year, it may continue to be carried forward.
Such carry forward is permitted up to and including the fourth accounting year.
The carried-forward amount shall be utilised only for the purpose of payment of bonus.
The utilisation of this amount shall be done in the manner prescribed by the Central Government.
36(2).
If for a particular accounting year, either:
There is no available surplus, or the allocable surplus is less than the minimum bonus payable to employees under section 26 then:
In such a situation, check whether there is any amount already carried forward and set on 36(1).
If there is no such carried-forward amount, or the amount available is insufficient to cover the minimum bonus payable,
Then the shortfall arises, which may be:
The entire minimum bonus amount, or
The deficiency between the allocable surplus and the minimum bonus.
This minimum amount or deficiency, as applicable, shall be carried forward.
The carried-forward amount shall be set off in the succeeding accounting year.
If it is not fully adjusted in that year, it may continue to be carried forward.
Such carry forward is permitted up to and including the fourth accounting year.
The manner in which this set-off is to be made shall be as prescribed by the Central Government.
Example:
The total salary or wages of the employees are ₹10,00,000.
The minimum bonus payable at 8.33% comes to ₹83,300.
Any deficiency can be carried forward for a maximum of four accounting years
In Year 1 there is deficiency
Assuming the available or allocable surplus for Year 1 is ₹40,000.
The minimum bonus required to be paid for the year is ₹83,300.
A shortfall of ₹43,300 arises (₹83,300 − ₹40,000).
There is no earlier set-on amount available for adjustment.
The employer is still required to pay the full minimum bonus of ₹83,300 to the employees.
The shortfall of ₹43,300 is treated as a deficiency.
This deficiency of ₹43,300 is carried forward as “set-off” to the next accounting year.
In year 2 we adjust this deficiency
Assuming the allocable surplus for Year 2 is ₹1,20,000.
The minimum bonus requirement for Year 2 remains ₹83,300.
Before deciding the bonus payable for Year 2, the carried-forward deficiency of ₹43,300 from Year 1 is first adjusted against the surplus.
After adjustment, the remaining surplus is ₹76,700 (₹1,20,000 − ₹43,300).
Accordingly, ₹76,700 is available for payment of bonus in Year 2.
The entire deficiency of ₹43,300 is fully absorbed.
No balance set-off remains to be carried forward.
36(3).
The Code recognises the principle of Set on and Set off for the payment of bonus.
The detailed manner in which this principle is to be applied shall be as provided in the rules.
These rules are to be framed by the Central Government.
The principle of set on and set off shall apply to all cases relating to payment of bonus under this Code.
This application is specifically meant for cases not already covered by 36(1) and 36(2).
36(4).
In an accounting year, there may be an amount that has been carried forward as either:
Set on (excess surplus) or Set off (deficiency).
Such carried-forward amounts may relate to more than one earlier accounting year.
When calculating the bonus for the succeeding accounting year, these carried-forward amounts must be considered.
The law lays down a priority rule for such consideration.
According to this rule, the amount carried forward from the earliest accounting year must be adjusted first.
Only after the earliest carried-forward amount is fully adjusted can amounts from later years be taken into account.
Example:
The total wages of the employees are ₹10,00,000.
The minimum bonus payable at the rate of 8.33% amounts to ₹83,300.
At the beginning of Year 3, there are two carried-forward deficiencies:
₹30,000 as set-off from Year 1.
₹20,000 as set-off from Year 2.
Year 3 - Adjustment Set Off
Assuming the allocable surplus for Year 3 is ₹40,000.
While calculating the bonus for Year 3, the carried-forward set-off amounts must be adjusted.
As per the rule, the deficiency from the earliest accounting year is to be adjusted first.
Accordingly, the Year-1 deficiency of ₹30,000 is adjusted against the Year-3 surplus.
After this adjustment, the remaining surplus is ₹10,000.
The remaining ₹10,000 is then adjusted against the Year-2 deficiency of ₹20,000.
As a result, ₹10,000 out of the Year-2 deficiency is absorbed.
The balance deficiency of ₹10,000 from Year 2 continues to be carried forward to the next accounting year.
Section 37. Adjustment of customary or interim bonus against bonus payable under this Code.
If in a particular accounting year:
(a). The employer has already paid a puja bonus or any other customary bonus to the employee.
(b). The employer has paid a part of the bonus payable under this Code in advance, before the date on which the bonus becomes payable.
Then:
The employer is entitled to deduct the amount of bonus already paid from the total bonus payable under this Code for that accounting year.
After making the deduction the employee is entitled to receive only the remaining balance, if any.
Section 38. Deduction of certain amounts from bonus payable.
If in a particular accounting year an employee is found guilty of misconduct and such misconduct causes financial loss to the employer then:
The employer is legally allowed to: Deduct the amount of the loss from the bonus payable to the employee under this Code.
This deduction can be made only for that same accounting year.
If any bonus amount remains after the deduction, then the employee is entitled to receive the balance.
Section 39. Time limit for payment of bonus.
39(1).
All amounts payable to an employee by way of bonus under this Code shall be credited to the bank account of the employee by the employer.
The amount has to be credited within eight months from the close of the accounting year.
The appropriate Government, or an authority specified by it upon application by the employer and for sufficient reasons may :
Extend the eight-month period to such further period as it thinks fit.
However, The total extension shall not exceed two years.
39(2).
Where there is a dispute regarding payment of bonus pending before any authority:
Such bonus shall be paid within one month from the date on which the award becomes enforceable or the settlement comes into effect.
If the dispute concerns payment at a higher rate, the employer shall pay 8⅓% of the wages earned as per the Code.
This has to be done within eight months from the close of the accounting year.
Section 40. Application of this Chapter to establishments in public sector in certain cases.
40(1)
A public sector establishment exists and carries on its operations during an accounting year.
During this accounting year, it earns gross income from various sources.
The establishment produces or manufactures goods, or provides certain services.
These goods or services are not exclusive or sovereign in nature.
The goods or services are offered in the open market.
Private sector establishments are also offering similar goods or services in the same market.
Therefore, the public sector establishment is operating in competition with private sector establishments.
From such competitive sale of goods or rendering of services, the public sector establishment earns income.
The income from these competitive activities is calculated for the accounting year.
This income is then compared with the total gross income of the public sector establishment for that year.
It is found that this income is not less than 20% of the gross income.
Once this 20% threshold is satisfied:
The provisions of this Chapter become applicable to the public sector establishment.
For the purposes of this Chapter, the public sector establishment is treated in the same manner as a similar private sector establishment.
The application of this Chapter for that accounting year is thereby completed.
40(2).
This chapter usually does not apply to employees working in public sector establishments.
If a public sector establishment falls within 40(1), the Chapter will apply to its employees.
If it does not fall within 40(1), the Chapter will not apply to its employees.
Thus, employees of public sector establishments are generally excluded, unless the law expressly brings them within the scope through 46(1).
Section 41. Non-applicability of this Chapter.
41(1).
Nothing in this Chapter shall apply to the following employees:
(a). Employees employed by the Life Insurance Corporation of India.
(b). Seamen, as defined in clause (42) of section 3 of the Merchant Shipping Act, 1958.
(c). Employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948, & employed by registered or listed employers.
(d). Employees employed by an establishment under the authority of any department of the Central Government, State Government, or a local authority.
(e). Employees employed by:
(i). The Indian Red Cross Society or any other similar institution, including its branches.
(ii). Universities and other educational institutions.
(iii). Institutions including hospitals, chambers of commerce, and social welfare institutions established not for profit.
(f). Employees employed by the Reserve Bank of India.
(g). Employees employed by public sector financial institutions other than banking companies, which the Central Government may, by notification, specify, having regard to:
(i). Its capital structure.
(ii). Its objectives and nature of activities.
(iii). The nature and extent of financial assistance or concessions given by the Government.
(iv). Any other relevant factor.
(h). Employees employed by inland water transport establishments operating on routes passing through any other country.
(i). Employees of any other establishment which the appropriate Government may exempt by notification, having regard to the overall benefits under any other scheme of profit sharing available in such establishments.
41(2).
Subject to 14(1), the provisions of this Chapter shall apply to any establishment in which 20 or more persons are employed or were employed on any day during an accounting year.
