CA.D.K.BAYYAREDDY (Chartered Accountant) (117 Points)
21 May 2008Dear Friends,
I am calculation the Allocable Surplus under the Bonus Act. Kindly help me out the steps to be followed?
| Originally posted by :Guest | ||
| " | PL HELP ME OUT WITH THE STEPS TO CALCULATE AVAILABLE/ALLOCABLE SURPLUS UNDER BONUS ACT | " |
| Originally posted by :Guest | ||
| " | PL HELP ME OUT WITH THE STEPS TO CALCULATE AVAILABLE/ALLOCABLE SURPLUS UNDER BONUS ACT | " |
| Originally posted by :Guest | ||
| " | Dear Sir, Kindly send me the format for calculating Allocable surplus for disrtibuting bonus and company is liable to pay how much bonus of allocable surplus. |
" |
| Originally posted by :Guest | ||
| " | Dear Sir, Kindly send me the format for calculating Allocable surplus for disrtibuting bonus and company is liable to pay how much bonus of allocable surplus. |
" |
Manoj Kumar Pandey
(Service)
(20 Points)
Replied 04 December 2008
| Originally posted by :Guest | ||
| " | Originally posted by :Guest " PL HELP ME OUT WITH THE STEPS TO CALCULATE AVAILABLE/ALLOCABLE SURPLUS UNDER BONUS ACT " |
" |
venkat Jayram
(GM)
(24 Points)
Replied 01 October 2009
| Originally posted by :CA.D.K.BAYYAREDDY | ||
| " | Dear Friends, I am calculation the Allocable Surplus under the Bonus Act. Kindly help me out the steps to be followed? |
" |
venkat Jayram
(GM)
(24 Points)
Replied 01 October 2009
Dear Sir
Please send me the format for calculating allocable surplus.
Thanks and regards
Venkat Jayram
Ram
(Senior Exe Finance)
(28 Points)
Replied 11 January 2011
| The method for calculation of annual bouns is as follow: | |||||||||||||||
| 1. Calculate the gross profit profit in the manner specified in- | |||||||||||||||
| 1. First Schedule, in case of a banking company, or | |||||||||||||||
| 2. Second Schedule, in any other case. | |||||||||||||||
| 2. Calculate the Available Surplus. | |||||||||||||||
| Available Surplus = A+B, where A = Gross Profit – Depreciation admissible u/s 32 of the Income tax Act - Development allowance - Direct taxes payable for the accounting year (calculated as per Sec.7) – Sums specified in the Third Schedule. | |||||||||||||||
| B = Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately preceding accounting year – Direct Taxes in respect of such gross profits as reduced by the amount of bonus, for the immediately preceding accounting year. | |||||||||||||||
| 3. Calculate Allocable Surplus | |||||||||||||||
| Allocable Surplus = 60% of Available Surplus, 67% in case of foreign companies. | |||||||||||||||
| 4. Make adjustment for ‘Set-on’ and ‘Set-off’. For calculating the amount of bonus in respect of an accounting year, allocable surplus is computed after considering the amount of set on and set offf from the previous years, as illustrated in Fourth Schedule. | |||||||||||||||
| 5. The allocable surplus so computed is distributed amongst the employees in proportion to salary or wages received by them during the relevant accounting year. | |||||||||||||||
|
What is set off? Suppose you dont have sufficient profit, you still have to pay bonus, this amount is set off to be adjusted against future profits (carried forward)
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| What is set on? After making all the adjustments, we can make payment of bonus (minimum bonus is 8.33% and maximum bonus 20% p.a. Of salary / wages), if we have surplus profit left, we can keep it for future, this is called set on – it can be used in next 4 years. | |||||||||||||||
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example... Gross profit 200, permissible exp. 40, depreciation 20, income tax : 20%, payments to workers 10. solution : (200 – 40 – 20) = 140 less tax : = 140-28= 112 60% is allocable surplus : 67 bonus to be given : 20% of 10 = 2. amount left : 67-2 = 65, the firm can set on for 4 years: Rs. 8. answer
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