Computation of the Allocable surplus under under POB Act


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Computation of the Allocable surplus under section 2(4) of Bonus Act

 

 

Step 1 – Calculate Gross Profit as per Second Schedule

(Plz note for Banking Company you have to use First Schedule)

 

[THE SECOND SCHEDULE]

[See section 4(b)] COMPUTATION OF GROSS PROFITS

 

Accounting Year ending.........

 

Item No.

Particulars

Amount

(Rs.)

1

Net Profit as per Profit and Loss Account.

 

2

Add back provision for:

 

(a)

Bonus to employees.

 

(b)

Depreciation.

 

(c)

Direct Taxes, including the provision  (if  any)  for  previous accounting years-

 
     

3[(d)

Development rebate/In vestment See foot-note (1) allowance/Development allowance reserve.]

 

(e)

Any other reserves. See foot-note- 1

 
 

Total of Item No. 2.

 
     

3

Add back also:

 

(a)

Bonus paid to employees in respect See foot-note (1) of previous accounting years.

 
     

4[(aa)

The amount debited in respect of gratuity paid or payable to employees in excess of the aggregate of

 

(i)

the amount, if any, paid to, or provided for payment to, an approved gratuity fund; and

 

(ii)

the   amount   actually   paid   to employees on their retirement or termination of their on employment for any reason.]

 

(b)

Donations   in   excess   of   the amount  admissible  for  income tax.

 

(c)

Any  annuity  due,  or  commuted value of any annuity paid, under the provisions of section 280D of the  Income-tax  Act  during  the accounting year.

 

(d)

Capital expenditure (other than capital expenditure on scientific research which is allowed as a deduction under any law for the time being in force relating to direct taxes) and capital losses (other than losses on sale of capital assets on which depreciation has been allowed for income-tax or agricultural income tax).

 

(e)

Losses of, or expenditure relating See foot-note (1) to, any business situated outside India.

 
     
 

Total of Item No. 3.

 
     

4

Add also income, profits or gains (if   any)   credited   directly   to reserves, other than -

 

(i)

capital receipts and capital profits (including profits on the sale of capital assets on which depreciation has not been
allowed for income-tax or agricultural income-lax);

 

(ii)

profits of, and receipts relating to, any India;

 

(iii)

income of foreign concerns from investments outside India.

 
     
 

Net total of Item No. 4

 
     

5

Total of Item Nos. 1, 2, 3 and 4

 
     

6

Deduct

 

(a)

Capital receipts and capital profits See foot-note (2) (other than profits on the sale of assets on which depreciation has been allowed for income-tax or agricultural income-tax).

 

(b)

Profits of, and receipts relating to, any business situated outside India.

 

(c)

Income of foreign concerns from investments outside India.

 

(d)

Expenditure or losses (if any) debited directly to reserves, other than-

 

(i)

capital expenditure and capital losses (other than losses on sale of capital assets on which depreciation has not been allowed for income-tax or agricultural income-tax;

 

(ii)

losses  of  any  business  situated outside India.

 

(e)

In  the  case  of  foreign  concerns proportionate (over-head)  expenses  of  Head Office business.

 

(f)

Refund of any direct tax paid for previous accounting years and
excess provision, if any, of previous accounting years relating to bonus, depreciation, taxation or develop-ment rebate or development allowance, if written back.

 

(f)

Refund of any direct tax paid for previous accounting years and
excess provision, if any, of previous accounting years relating to bonus, depreciation, taxation or develop-ment rebate or development allowance, if written back.

 

(g)

Cash subsidy, if any, given by the Government or by any body corporate established by any law for the time being in force or by any other agency through budgetary grants, whether given directly or through any agency for specified purposes and the proceeds of which are reserved for such purposes.

 
     
 

Total of Item No. 6

 
     

7

Gross   Profit   for   purposes   of bonus (Item No. 5 minus Item No. 6)

 

 

 

Note:

 

(1) If, and to the extent, charged to Profit and Loss Account.

(2)If, and to the extent, credited to Profit and Loss Account.

 

(3)In the proportion of Indian Gross Profit (Item No. 7) to Total World Gross Profit (as per Consolidated Profit and Loss Account, adjusted as in Item No.2 above only)

 

 

Step 2 – Calculate Depreciation Under Section 6(a)

 

It is depreciation admissible in accordance with the provisions of sub-section (1) of section 32 of the Income-tax Act.

 

 

Step 3 – Calculate Development Rebate or Development Allowance Section 6(b)

 

It is development rebate or investment allowance or development allowance which the employer is entitled to deduct from his income under the income-tax Act.

 

Step 4 – Calculate Direct Taxes payable by Employer

 

It is any direct tax which the employer is liable to pay for the accounting year in respect of his income, profits and gains during that year as per Income Tax Act.

 

 

Step 5 – Calculate sum as specified under the third schedule to the Act

 

Particulars

Amt (Rs.)

1 : Company, other than a Banking Company:

 
   

(i) The dividends payable on its preference share capital for the accounting year calculated at the actual rate at which such dividends are payable;

 
   

(ii)  8.5 per cent of its paid up equity sharecapitalasatthe commencement of the accounting year;

 
   

(iii) 6 per cent of its reserves shown in   its   balance-sheet   as   at   the commencement  of the accounting year,  including  any  profits  carried forward from the previous accounting year: Provided that where the employer is a   foreign   company   within   the meaning  of  section  591  of  the Companies  Act,  1956  (1  of  1956), the  total  amount  to  be  deducted under  this  Item  shall  be  8.5  per cent, on the aggregate of the value of  the  net  fixed  assets  and  the current  assets  of  the  company  in India after deducting the amount of its current liabilities (other than any amount  shown  as  payable  by  the

 
   

company to its Head Office whether towards any advance made by the Head  Office  or  otherwise  or  any interest paid by the company to its Head Office) in India.

 
   

2. Any other employer not being Banking Co., Corporation or Co-operative society

 

8.5 per cent, of the capital invested by him in his establishment as
evidenced from his books of accounts at the commencement of
the accounting year:

 

Provided that where such employer is a person to whom Chapter XXII-A
of the Income-tax Act applies, the annuity deposit payable by him
under the provisions of that Chapter during the accounting year shall also be deducted.

 
   

3. Where such employer is a firm

 

An amount equal to 25 per cent, of the gross profits derived by it from the establishment in respect of the accounting year after deducting depreciation in accordance with the provisions of clause (a) of section 6 by way of remuneration to all the partners taking part in the conduct of
business of the establishment shall also be deducted,

 

but where the partnership agreement, whether oral or written, provides for the payment of remuneration to any such partner,
and
(i) the total remuneration payable to all such partners is less than the
said 25 per cent, the amount payable, subject to a maximum
of forty-eight thousand rupees to each such partner; or

(ii) the total remuneration payable to all such partners is higher than
the said 25 per cent, such percentage, or a sum calculated
at the rate of forty-eight thousand rupees to each such
partner, whichever is less, shall be deducted under this proviso:

 

(ii) forty-eight thousand rupees, whichever is less, by way of remuneration to such employer, shall also be deducted.

 
   

4. Where such employer is an individual or a Hindu undivided family

 

(i) an amount equal to 25 per cent, of the gross profits derived by such employer from the establishment in respect of the accounting year after deducting depreciation in accordance with the provisions of clause (a) of
section 6; or

 

(ii) forty-eight thousand rupees, whichever is less, by way of remuneration to such employer, shall also be deducted.

 

 

Explanation.—The expression “reserves” shall not include any amount set apart for the purpose of—

 

(i) payment of any direct tax which, according to the balance-sheet, would be payable;

 

(ii) meeting any depreciation admissible in accordance with the provisions of clause (a) of section 6;

 

(iii) payment of dividends which have been declared, but shall include:

(a) any amount, over and above the amount referred to in clause (i) of this Explanation, set apart as specific reserve for purpose of payment of any direct lax; and

(b) any amount set apart for meeting any depreciation in excess of the amount admissible in accordance with the provisions of clause (a) of section 6.

 

 

Step 6 – Calculation of Available Surplus:

 

It is equal to amount arrived at Step -1 less sum of amount arrived at Step 2 to Step 5

 

 

Step 7 – Calculation of Allocable Surplus:

 

It is equal to 60% (67% in case of foreign company) of amount arrived under Step 6.


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Believe!! Live your dreams!

Plz not last date of filing Annual return under POB Act is 31 Dec 2013.

 
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Bookmarked sirjiiii yes


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(Guest)

yes

 
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(Guest)

yes

 
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Believe!! Live your dreams!

Hi

 

Alos find attached excel calculator for calculating Bonus payable as per Payment of Bonus Act.

 

Thanks//VaibhavJ



Attached File : 112266 1266300 calculation of statutory bonus payable as poba.xls downloaded 3068 times
 
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Can we have a sample case for calculation of available surplus with presumed figures.

 
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Group Head -Finance and Accounts

Dear Vaibhav

For partner ship firm to find out allocable surplus :- Can we deduct 8.5% of the capital invested by the partner in his establisment 

Regards

Jayaram G

 


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Dear Sir,

 

If the amount of allocable surplus is negative then it is requried to pay minimum bonus of 8.33 % ..

 

Please suggest

 

 
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DGM Accounts

Please clarify whether deduction claimed under section 32AC is a investment allowance tobe considered for allocable surplus.

 
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