Section 4 of POB Act, 1965 : Section 4: Computation Of Gross Profits

Explanation using Example

Imagine a scenario where XYZ Bank, a banking company, has completed its accounting year and wants to calculate the bonus to be paid to its employees. According to Section 4 of The Payment of Bonus Act, 1965, XYZ Bank must calculate its gross profits as per the method specified in the First Schedule of the Act. This will involve adjustments like adding back any interest or taxes paid, and then subtracting expenses as outlined in the Schedule. The resulting figure will be the gross profit, which will be used to determine the bonus pool available for the employees of XYZ Bank for that accounting year.