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    Question

    According to Section 36(1) of the Code on Wages, 2019, what happens if, for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under Section 26?

    A It is forfeited and cannot be carried forward. Correct Answer Incorrect Answer
    B It is carried forward for being set on in the succeeding accounting year. Correct Answer Incorrect Answer
    C It is utilized for the payment of other employee benefits. Correct Answer Incorrect Answer
    D It is distributed among the shareholders of the company. Correct Answer Incorrect Answer

    Solution

    It is carried forward for being set on in the succeeding accounting year, Explanation: As per Section 36- (1) Where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under section 26, then, the excess shall, subject to a limit of twenty per cent. of the total salary or wage of the employees employed in the establishment in that accounting year, be carried forward for being set on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilised for the purpose of payment of bonus in such manner as may be prescribed by the Central Government.

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