Payment of bonus act

Question 1

The Payment of Bonus Act, 1965 applies to factories and establishments with at least: a) 5 employees b) 10 employees c) 20 employees d) 50 employees

Answer 1

c) 20 employees

Question 2

Under Section 2(13), a “salary or wage” does not include: a) Dearness Allowance b) Basic Pay c) Overtime Wages d) Production Bonus

Answer 2

c) Overtime Wages

Question 3

The minimum bonus payable under the Act is: a) 4% of salary b) 8.33% of salary c) 10% of salary d) 12% of salary

Answer 3

b) 8.33% of salary

Question 4

The maximum bonus payable under the Act is: a) 15% of salary b) 20% of salary c) 25% of salary d) 30% of salary

Answer 4

b) 20% of salary

Question 5

Employees drawing wages up to _____ per month are eligible for bonus. a) ₹5,000 b) ₹10,000 c) ₹15,000 d) ₹21,000

Answer 5

d) ₹21,000

Question 6

Under Section 10, the employer must pay a minimum bonus if the company has: a) No allocable surplus b) Profits c) Financial losses d) Excess reserves

Answer 6

a) No allocable surplus

Question 7

An employee is eligible for bonus only if they have worked for at least: a) 30 days b) 60 days c) 90 days d) 120 days

Answer 7

a) 30 days

Question 8

As per Section 11, the maximum bonus is payable when: a) The employer decides b) The company makes profits c) Allocable surplus exceeds minimum bonus d) Employees demand it

Answer 8

c) Allocable surplus exceeds minimum bonus

Question 9

Bonus is calculated based on: a) Employee’s total salary b) Basic salary and dearness allowance c) Only dearness allowance d) Total turnover of company

Answer 9

b) Basic salary and dearness allowance

Question 10

A newly established company is required to pay a bonus after: a) 1 year of operation b) 2 years of operation c) 3 years of operation d) 5 years of operation

Answer 10

c) 3 years of operation

Question 11

Under Section 17, an employee dismissed for fraud or misconduct is: a) Entitled to full bonus b) Entitled to half bonus c) Not entitled to bonus d) Entitled only after 3 years

Answer 11

c) Not entitled to bonus

Question 12

The allocable surplus is calculated as per: a) Section 2(4) b) Section 3 c) Section 4 d) Section 5

Answer 12

d) Section 5

Question 13

As per Section 21, disputes regarding bonus can be settled by: a) Trade unions b) Labour courts c) Employer’s decision d) High Court

Answer 13

b) Labour courts

Question 14

If an employer fails to pay a bonus, they can be punished with: a) ₹5,000 fine b) ₹10,000 fine c) Imprisonment up to 6 months d) Both fine and imprisonment

Answer 14

d) Both fine and imprisonment

Question 15

Bonus must be paid within ____ months from the close of the accounting year. a) 6 months b) 8 months c) 9 months d) 12 months

Answer 15

c) 9 months

Question 16

The Payment of Bonus Act, 1965 extends to: a) Whole of India b) Only urban areas c) Only industrial states d) Only central government employees

Answer 16

a) Whole of India

Question 17

As per Section 32, which establishment is exempt from paying bonus? a) IT Companies b) Public Sector Enterprises c) Charitable institutions d) Small businesses

Answer 17

c) Charitable institutions

Question 18

The term “gross profit” is defined under which schedule of the Act? a) First Schedule b) Second Schedule c) Third Schedule d) Fourth Schedule

Answer 18

a) First Schedule

Question 19

Which of the following is not included in “allocable surplus”? a) Direct tax b) Depreciation c) Bonus paid in previous years d) Net profit

Answer 19

d) Net profit

Question 20

The Payment of Bonus Act, 1965 was introduced based on recommendations of: a) First Finance Commission b) Labour Commission c) Bonus Commission d) Parliament Committee

Answer 20

c) Bonus Commission

Question 21

Under Section 13, bonus shall be paid in: a) Cash b) Kind c) Shares d) Any mode

Answer 21

a) Cash

Question 22

For calculating bonus, an employee’s salary is considered up to: a) ₹7,000 b) ₹10,000 c) ₹15,000 d) ₹21,000

Answer 22

a) ₹7,000

Question 23

Section 19 specifies that bonus should be paid within: a) 1 month of completion of the financial year b) 6 months of completion of the financial year c) 9 months of completion of the financial year d) 12 months of completion of the financial year

Answer 23

c) 9 months

Question 24

Under the Act, “set on” and “set off” provisions refer to: a) Calculation of wages b) Bonus carry forward in case of surplus/deficit c) Employee rights d) Bonus deductions

Answer 24

b) Bonus carry forward in case of surplus/deficit

Question 25

Bonus is payable to employees in which sector? a) Public sector enterprises with profit b) Private sector only c) Government employees d) Contractual workers

Answer 25

a) Public sector enterprises with profit

Question 26

Under Section 26, an employer who fails to comply with the Act can be punished with imprisonment up to: a) 3 months b) 6 months c) 1 year d) 2 years

Answer 26

b) 6 months

Question 27

Under Section 16, newly established companies are exempt from paying a bonus for the first: a) 2 years b) 3 years c) 4 years d) 5 years

Answer 27

b) 3 years

Question 28

Under the Act, "allocable surplus" means: a) 40% of available surplus (for companies paying tax at normal rate) b) 50% of available surplus (for companies not paying tax) c) Either (a) or (b) d) 100% of available surplus

Answer 28

c) Either (a) or (b)

Question 29

If an employee has worked for only 45 days in a financial year, are they eligible for a bonus? a) Yes b) No c) Only if employer agrees d) Only if trade union demands it

Answer 29

b) No

Question 30

Under Section 18, an employee cannot receive a bonus if they are dismissed for: a) Maternity leave b) Prolonged illness c) Theft or violent behavior d) Personal grievances

Answer 30

c) Theft or violent behavior

Question 31

If a company has no available surplus for bonus, the employer must: a) Pay 8.33% minimum bonus b) Pay 5% of salary c) Pay nothing d) Reduce the next year’s salary

Answer 31

a) Pay 8.33% minimum bonus

Question 32

Employees in which of the following establishments do not qualify for a bonus under the Act? a) Government hospitals b) Private banks c) Manufacturing units d) Construction companies

Answer 32

a) Government hospitals

Question 33

Bonus must be paid in cash within: a) 1 month b) 3 months c) 6 months d) 9 months

Answer 33

d) 9 months

Question 34

A company having continuous losses for 5 years: a) Must still pay minimum bonus b) Is exempt from paying bonus c) Can pay a reduced bonus d) Can defer payment

Answer 34

b) Is exempt from paying bonus

Question 35

The term "set on" in bonus calculation means: a) Adjusting previous year’s unpaid bonus b) Carrying forward surplus bonus c) Deducting tax from bonus d) Increasing wages in place of bonus

Answer 35

b) Carrying forward surplus bonus

Question 36

If an employer wants to give more than 20% bonus, they must: a) Get government approval b) Declare it in writing c) Consult employees d) Reduce salaries

Answer 36

b) Declare it in writing

Question 37

Bonus calculation is based on: a) Financial year b) Calendar year c) Employer’s preference d) Bonus Commission recommendation

Answer 37

a) Financial year

Question 38

The minimum bonus amount is: a) ₹500 b) ₹1,000 c) ₹2,500 d) ₹3,000

Answer 38

b) ₹1,000

Question 39

The Bonus Act does not apply to: a) Seasonal industries b) Banking companies c) Government employees d) Employees earning above ₹21,000

Answer 39

c) Government employees

Question 40

Under Section 34, any rule or agreement which reduces bonus benefits under the Act is: a) Valid b) Invalid c) Needs approval d) Subject to employer discretion

Answer 40

b) Invalid

Question 41

Employees in which of the following categories are eligible for a bonus? a) Apprentices b) Contract workers c) Managers earning ₹25,000 d) Sales representatives

Answer 41

b) Contract workers

Question 42

The principal authority responsible for enforcing the Bonus Act is: a) Trade unions b) Employers' associations c) Labour Inspectors d) High Court

Answer 42

c) Labour Inspectors

Question 43

If an employee is absent for more than 30 days in a year, their bonus will: a) Be reduced proportionally b) Be forfeited completely c) Be doubled d) Not be affected

Answer 43

a) Be reduced proportionally

Question 44

Under Section 22, disputes regarding bonus must be resolved within: a) 6 months b) 12 months c) 18 months d) 24 months

Answer 44

b) 12 months

Question 45

The term "set off" in bonus calculation means: a) Adjusting excess bonus paid in previous years b) Deducting taxes c) Reducing salary d) Paying half the required bonus

Answer 45

a) Adjusting excess bonus paid in previous years

Question 46

Under Section 32, which industry is specifically exempt from bonus payments? a) Public Transport Services b) Software companies c) Electricity Generation & Distribution d) Hotels

Answer 46

c) Electricity Generation & Distribution

Question 47

As per the Bonus Act, seasonal employees are entitled to: a) Half the minimum bonus b) Full minimum bonus c) Bonus for the number of days worked d) No bonus

Answer 47

c) Bonus for the number of days worked

Question 48

If an employer has multiple units, bonus calculations should be: a) Done separately for each unit b) Combined for all units c) Based on company-wide profit d) Decided by management

Answer 48

a) Done separately for each unit

Question 49

Under the Act, an employee receiving ₹25,000 per month is: a) Eligible for a bonus b) Not eligible for a bonus c) Eligible only if employer allows d) Eligible for half bonus

Answer 49

b) Not eligible for a bonus

Question 50

Which of the following is true regarding the Bonus Act? a) Employers can pay more than 20% bonus voluntarily b) Employees earning ₹30,000 are eligible for a bonus c) Bonus is payable only in government organizations d) The Act applies only to companies with 100+ employees

Answer 50

a) Employers can pay more than 20% bonus voluntarily