Section 6 of POB Act, 1965 : Section 6: Sums Deductible From Gross Profits

Explanation using Example

Imagine a manufacturing company, ABC Manufacturing Pvt. Ltd., has had a profitable year and is calculating the bonus to be paid to its employees under The Payment of Bonus Act, 1965. To determine the available surplus for bonus distribution, the company needs to calculate its gross profits and then deduct prior charges as per Section 6 of the Act:

• The company can deduct the depreciation on its machinery and equipment as allowed under the Income-tax Act, which is a standard practice to account for wea...

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