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CS Executive · Setting Up of Business, Industrial and Labour Laws · The Code on Wages, 2019

Anil Foods Ltd., Nagpur, closed its accounting year on 31 March. Under the Code on Wages, 2019, and without any extension or pending dispute, within what period must bonus payable be credited to the employees' bank accounts?

Bonus must be credited to the employee's bank account within eight months from the close of the accounting year. The appropriate Government may extend this on the employer's application for sufficient reasons, but the total extended period cannot exceed two years.

  1. AWithin one month from the close of the accounting year
  2. BWithin eight months from the close of the accounting yearCorrect
  3. CWithin twelve months from the close of the accounting year
  4. DWithin two years from the close of the accounting year

Explanation

Section 39(1) requires bonus to be paid by crediting the employee's bank account within eight months from the close of the accounting year. Two years is only the maximum total period after extension by the appropriate Government, so it is not the default.

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