Bonus provision - practical issues (continued)

TDS 1034 views 2 replies

I had a doubt regarding practical issue concerning bonus. It has remained unresolved since year 2008. Below is link to the post :

 

/experts/bonus-provision-practical-issues-27021.asp

 

The experts who tried to respond to query have not replied to my further question based on their reply.

 

I request someone to please resolve the query.

 

Thanks.

 

Replies (2)

Dear anil,

There is a diff between bonus provision and declaration of bonus to employee. TDS u/s 192  will not be applicable for bonus provision.

 

Dear Sir,

 

 

I thank you very much for responding to my post.

 

 

Please assume a scenario where :

 

 

a)  during the month of June 2012 ACTUAL bonus payable to employees as per Bonus Act is computed for the previous year ending 31 March 2012.  The board also has approved the payment.

 

 

b) Statutory audit got completed in July 2012.

 

 

c) Payment of bonus as calculated in point (a) is paid in August 2012

 

 

d) Since the bonus calculated as above in point  (a) is for previous year ending 31 march 2012 and that bonus expenditure belongs to period ending 31 March 2012 the following entry was passed on 31 March 2012:

 

 

Employee cost.........................Dr

                     To  Bonus payable

(Being ACTUAL Bonus payable to employees for Financial year 2011-12 provided)

 

 

a) In above case is not TDS required to be computed on bonus so payable for year ending 31 March 2012 and paid to IT department?

 

 

b) Instead of bonus, if entry for salary payable to an employee was passed in books on 31 March 2012 and this entry was passed in July 2012, TDS would have been payable on such salary payable. So why is bonus treated differently? by definition, i think, salary includes bonus.

 

Please correct me if my understanding is wrong.

 

 

Thanks.

 


CCI Pro

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