Rule 54: Manner of composition of offences
Rule 54 — Governs manner of composition of offences and the rights, duties, powers or procedure expressly stated in this rule. Key operative text: (1) An accused person desirous of composition of offence under sub-section (1) of section 56 may make an application in Form VI electronically or manually to the Gazetted Officer notified under said sub-section.
Full notified rule textG.S.R. 343(E), 8 May 2026Source checked: 20 August 2026
Rule status
Code on Wages (Central) Rules, 2026 were finally notified under G.S.R. 343(E), 8 May 2026. The Central Rules must be read with the Code and any later amendment/corrigendum.
Official Gazette
Finin2min analysis — operative rule mechanics
Operative clauses
- (1) An accused person desirous of composition of offence under sub-section (1) of section 56 may make an application in Form VI electronically or manually to the Gazetted Officer notified under said sub-section.
- (2) The Gazetted Officer referred to in sub-rule (1) shall on receipt of such application, satisfy as to whether the offence is compoundable or not under the Code and, if the offence is compoundable and the accused person agrees for the composition, compound the offence for a sum of fifty per cent of the maximum fine provided for such offence under the Code, to be paid by the accused within thirty days of the order of…
- (3) The compounding officer shall issue a composition certificate in Part-B of Form-VI within ten days of receipt of the composition amount, to such person from whom such amount has been received in compliance of the composition notice.
- (4) In case where a person so noticed fails to deposit the composition amount within the time specified by the compounding officer, prosecution shall be instituted before the competent court against such person for such offence in respect of which the compounding notice was issued.
- (5) Where the offence has been compounded under sub-rule (2) after the institution of the prosecution, the officer shall send a copy of such order for intimation to the officer referred to in sub- section (1) of section 53 for action under sub-section (6) of section 56.
Provisos / explanations
- Provided that where the employer is a foreign company within the meaning of section 2
- Provided that where the banking company is a foreign company within the meaning of section 2
- Provided that where such employer is a person to whom Chapter XXII-A of the income Tax not Act applies , the annuity deposit payable under the provisions of that Chapter during the fallin accounting year shall also be deducted: g under any
- Explanation.— In sub-item (b) of Item 3, "approved gratuity fund" has the same meaning assigned to it in clause
Thresholds & timelines
- (2) The Gazetted Officer referred to in sub-rule (1) shall on receipt of such application, satisfy as to whether the offence is compoundable or not under the Code and, if the offence is compoundable and the accused person agrees for the composition, compound the offence for a sum of fifty per cent of the maximum fine provided for such offence under the Code, to…
- (3) The compounding officer shall issue a composition certificate in Part-B of Form-VI within ten days of receipt of the composition amount, to such person from whom such amount has been received in compliance of the composition notice.
- (3) (a)The applicant(s) has/ have been paid wages at less than the minimum rates of wages fixed for their category (categories) of employment(s) under the Code by Rs…. …………..Per day for the period(s) from………………………to……… ……………….
- Per day for the weekly days of rest from ............................to… (c) The applicant(s) has/ have not been paid wages at overtime rate(s) for the period from…………………..to….
- (f) The applicant(s) has/have not been paid minimum bonus for the accounting year ……………..
Mapped Code sections
Full notified text — Rule 54
English rule text transcribed from the final official 2026 Gazette PDF; layout is normalised for web reading. The Gazette controls.
54. Manner of composition of offences:––(1) An accused person desirous of composition of offence
under sub-section (1) of section 56 may make an application in Form VI electronically or manually
to the Gazetted Officer notified under said sub-section.
(2) The Gazetted Officer referred to in sub-rule (1) shall on receipt of such application, satisfy as to
whether the offence is compoundable or not under the Code and, if the offence is compoundable and the
accused person agrees for the composition, compound the offence for a sum of fifty per cent of the
maximum fine provided for such offence under the Code, to be paid by the accused within thirty days
of the order of composition issued by such officer.
(3) The compounding officer shall issue a composition certificate in Part-B of Form-VI within ten
days of receipt of the composition amount, to such person from whom such amount has been received in
compliance of the composition notice.
(4) In case where a person so noticed fails to deposit the composition amount within the time specified
by the compounding officer, prosecution shall be instituted before the competent court against such
person for such offence in respect of which the compounding notice was issued.
(5) Where the offence has been compounded under sub-rule (2) after the institution of the
prosecution, the officer shall send a copy of such order for intimation to the officer referred to in sub-
section (1) of section 53 for action under sub-section (6) of section 56.
FORM I
(See clause (i) of sub-rule (1) of rule 51)
EMPLOYEE REGISTER
Name of the Establishment
Name of the Employer
Name of the Owner
PAN/TAN of the Employer
Registration Number of the establishment
(Labour Identification Number (LIN) shall be the
Registration Number of the Establishment)
1. Employee Code
2. Name
3. Surname
4. Gender
5. Father’s/Mother’s/Spouse Name
6. Date of Birth
7. Place of Birth
8. Nationality
9. Education Level
10. Date of Joining
11. Designation
12. Category (HS/S/SS/US)*
13. Type of Employment (P/T/FT/T/B)**
14. Details of Posting
15. Pay
16. Promotion
17. Mobile Number
18. Universal Account Number (UAN)
19. PAN
20. Nominee
(To be filled on the basis of Nomination form)
21. Details of Family
22. EPS/NPS
23. ESIC IP No.
24. AADHAAR NO.
25. Bank A/c Number
26. Bank
27. Branch (IFSC)
28. Present Address
29. Permanent Address
30. Service Book No.
31. Date of Exit
32. Reason for Exit
33. Mark of Identification
34. Photo
35. Specimen Signature/Thumb Impression
36. Remarks
* (Highly Skilled/Skilled/Semi skilled/Unskilled)
** (Permanent/Temporary/Fixed Term/Trainee/Badli)
FORM-II
[See sub rule (1) of rule 49]
[SINGLE APPLICATION UNDER SUB-SECTION (5) OF SECTION 45]
BEFORE THE AUTHORITY APPOINTED UNDER SUB SECTION (1) OF SECTION 45 OF THE CODE ON
WAGES, 2019 (29 OF 2019)
FOR…………. AREA……… Application No
........................................................................................... of 20……
Between ABC and (State the number)………other ................................................................................ Applicant
(Through employees concerned or registered trade union or Inspector- cum- Facilitator
Address……………………………………………………………………………….
And XYZ…………………………………………………………………………………………….
Address……………………… The
application states as follows:
(1) The applicant(s) whose name(s) appear in the attached schedule was/were/has/have been employed from
……………to…….. as……………...(category) in ............................................................................... (establishment)
Shri/M/s………engaged in ………….(nature of work) which is/are covered by the Code on Wages, 2019.
(2) The opponent(s) is/are the employer(s) within the meaning of section 2(l) of the Code on Wages, 2019.
(3) (a)The applicant(s) has/ have been paid wages at less than the minimum rates of wages fixed for their category
(categories) of employment(s) under the Code by Rs…. …………..Per day for the period(s) from………………………to………
……………….
(b) The applicant(s) has/ have not been paid wages at Rs ................................. Per day for the weekly days of
rest from ............................to…
(c) The applicant(s) has/ have not been paid wages at overtime rate(s) for the period
from…………………..to….
(d) The applicant(s) has/have not been paid wages for period from ………………to………. (e)Deductions have been
made which are in contravention of the Code, from the wage(s) of the applicant(s) as per details specified in the
annexure appended with this application.
(f) The applicant(s) has/have not been paid minimum bonus for the accounting year ……………..
(4) The applicant(s) estimate(s) the value of relief sought by him/ them on each amount as under:
(a) Rs…….
(b) Rs…….
(c) Rs……. Total
Rs…….
(5) The applicant(s), therefore, pray(s) that a direction may be issued under section 45(2) of the Code on Wages,
2019 for;
(a) payment of the difference between the wages payable under the Code and the wages actually paid,
(b) payment of remuneration for the days of rest
(c) payment of wages at the overtime rates,
(d) compensation amounting to Rs………………………
(6) The applicant(s) do hereby solemnly declare(s) that the facts stated in this application are true to the best of
his/their knowledge, belief and information.
Dated
Signatire of thumb-impression of the
Emplyed person(s) of official of a
registerd trade union duly authorized or
inspector-cum-Faciliator
Note:The applicant(s), if required, may append annexures containing details, with this application.
FORM III
(See sub rule (1) of rule 50)
APPEAL UNDER SECTION 49(1) OF THE CODE ON WAGES, 2019 BEFORE THE
APPELLATE AUTHORITY UNDER THE CODE ON WAGES, 2019
A.B.C
Address………………………………………………………………………………………
… ......................APPELLANT
Vs.
C.D.E.
Address………………………………………………………………………………………………..………
RESPONDENT
DETAILS OF APPEAL:
1. Particulars of the order against which the appeal is made : Number
and date :
The authority who has passed the impugned order:
Amount awarded:
Compensation awarded , if any :
2. Facts of the case :
(Give here a concise statement of facts in a chronological order, each paragraph containing as nearly as possible a
separate issue or fact).
3. Grounds for appeal :
4. Matters not previously filed or pending with any other Court or any Appellate Authority:
The appellant further declares that he had not previously filed any appeal, writ petition or suit regarding the matter in
respect of which this appeal has been made, before any Court or any other Authority or Appellate Authority nor any such
appeal, writ petition or suit is pending before any of them.
5. Reliefs sought :
In view of the facts mentioned above the appellant prays for the following relief(s) :—[Specify below
the relief(s) sought]
6. List of enclosures:
1.
2.
3.
4.
……….. Date :
Place :
Signature of the appellant.
For office use
Date of filing or
Date of receipt by post
Registration No.
Authorized Signatory
FORM-IV
(See clause (ii) of sub rule (1) of rule 51)
REGISTER OF WAGES, OVERTIME, ADVANCES, FINES AND DEDUCTIONS
FOR DAMAGE AND LOSS
Name of the
Establishment
Name of the
Employer
Name of the Owner
PAN/TAN of the
Employer
Registration
Number of the
establishment
(Labour
Identification
Number (LIN) shall
be
the Registration
Number of the
Establishment)
Sr. No. Nam De De Duration of Wage Total no. of Total overtime Rate of
in e sig part Payment of wages Perio days hours worked or wages
Sl Employ of nati me (Monthly/ d worked overtime B D All
. nt
ee the on Fortnightly/Weekly From- during the production in case as A ow
N
o. Registe empl / Daily/Piece rated) To wage of piece workers ic anc
r/ oyee period es
Employ
ee
Code
(1) (2) (3) (4) (5) (6) (7) (8) (9) (1 (1 (12)
0) 1)
Amount of wages Deductions Net
earned Paymen
Bas DA All Ove Total EPF ESI Soc Inc Insu Adv Reco Recovery Tota Oth t
ic ow rtim wages C iety om ranc ance very on l ers
anc e earned e e s of account Ded
es Tax Fine of uctio
Damages/ ns
Losses
(13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) (26) (27) (28)
Date of Receipt by Nature of acts Amount Damage or loss Signature of
Payment employee/Bank and omissions of fine caused to the Employer/Employer
transaction ID for which fine imposed employer by Representative*
imposed with neglect or default
date of the employee
(28) (29) (30) (31) (32) (33)
*Note: Required in case register is maintained physically.
FORM V
(See rule 52)
WAGE SLIP
Date of issue
Name of the Establishment
Address
Period
1. Name of employee
2. Father’s/Mother’s/Spouse Name
3. Designation
4. UAN
5. Bank Account Number
6. Wage period
7. Rate of wages payable
a. Basic
b. DA
c. Allowances
8. Total attendance/unit of work
done
9. Overtime wages
10. Gross wages payable
11. Total deductions
a. PF
b. ESI
c. Others
12. Net wages paid
*Employer / Pay-in-charge signature
Note: Required in case register is maintained physically
FORM VI
Part - A
[See sub rule (1) of rule 54]
APPLICATION UNDER SUB-SECTION (4) OF SECTION 56 FOR COMPOSITION OF OFFENCE
1. Name of applicant :
2. Father’s / Spouse name :
3. Address of the applicant :
4. Particulars of the offence:….. ..…………………………………………………………………………
…………………………………………………………………………………………………………………
5. Section of the Code under which the offence is committed :
……………………………………………………………..
6. Maximum fine provided for the offence under the Code :
………………………………………………………………….
7. Whether prosecution against the applicant is pending or not
……………………………………………………..
8. Whether the offence is first offence or the applicant had committed any other offence prior to the
offence. If yes, then, full details of the prior offence.
…………………………………………………………………………………………………………………
9. Any other information which the applicant desires to provide
…………………………………………………………………………………………………………………
Applicant (Name and signature)
Dated:
PART – B
[See rule 54 (3)]
Composition Certificate
Ref: Notice No………….. Date:
This is to certify that the offence under sub-section …… of section 54 in respect of which Notice No. Dated: _____ was
issued to Sh…………. (Applicant), the employer of ……………. (name and registration number of establishment) has been
compounded on account of remission of full amount of Rs ……….. (Rupees _________________) towards the composition
of offences to the satisfaction of the said notice.
(Signature)
Name and Designation of the Officer
Date:
Place:
To:
………………..(Employer/Establishment)
…………………(Name and registration number)
………………….(Address)
FORM-VII
(See clause (a) of sub rule (1) of rule 45) NOMINATION
FORM
1. Name of person making nomination:
(In block letters):
2. Father's/Spouse's Name:
3. Date of Birth:
4. Sex:
5. Marital Status:
6. Address:
Permanent:
Temporary:
I hereby nominate the person(s)/cancel the nomination made by me previously and nominate the person(s)
mentioned below to receive any amount due to me from the employer in the event of my death:-
Name of Address Nominee's Date Total amount of If the nominee is minor, name,
nominee/nominees relationship of share of relationship, and address of the
with the Birth accumulations in guardian who may receive the
employee credit to be paid to amount during the minority of
each nominee nominee
(1) (2) (3) (4) (5) (6)
1. Certified that I have no family and if I acquire a family hereafter, the above nomination shall be deemed as
cancelled.
2. Certified that my father/mother is/are dependent upon me.
3. Strike out whichever is not applicable.
Signature or the thumb impression of the employee
CERTIFICATE BY EMPLOYER
Certified that the above declaration and nomination has been signed/thumb impressed before me by Shri/Smt/Ku
................................................... employed in my establishment after he/she has read the entry/entries or
have been read over to him/her by me and got confirmed by him/her in either of the cases. Signature of the
employer or other authorised officer of the establishment and Designation Place:
Date:
Name and Address of the Factory/Establishment and rubber stamp thereof
ACKNOWLEDGEMENT BY THE EMPLOYEE
Received the duplicate copy of nomination in Form-VIII filed by me and duly certified by the employer. Date:
Signature of the Employee
FORM VIII
(See sub rule (2) of Rule 49)
(A). FORM OF NOTICE TO THE RESPONDENT TO BE ISSUED BY THE AUTHORITY UNDER SUB-SECTION (5) OF
SECTION 45
(Title of the application)
To
Name Address
Whereas (name of the applicant) has made the above said application tome under the Code
on Wages, 2019, you are hereby summoned to appear before me in person or by a duly authorized
representative, and required to answer all material questions relating to the application, or shall be,
accompanied by some person duly authorized by you and able to answer such question on the………….Day
of…….20….at………AM/PM, to answer the claim in application and as the day fixed for the appearance is
appointed for the final disposal of the application, you must be prepared to produce on that day all the
witnesses upon whose evidence and the documents upon which you intend to rely in support of your
defense.
Take notice that in default of your appearance on the day mentioned here above, the application will be
heard and disposed of in your absence.
Date…………. Signature of the authority with seal
(B). FORM OF NOTICE TO THE RESPONDENT TO BE ISSUED BY THE APPELLATE AUTHORITY UNDER
SUB-SECTION (1) OF SECTION 49
(Title of the appeal)
To
Name Address
Take notice that an appeal (copy of which is enclosed) under section 49 of the Code on Wages, 2019 has
been presented by (name of appellant) before this appellate authority,
and that the day of 20 has been fixed by this appellate authority for the
hearing of the appeal.
If no appearance is made by you in person or by a duly authorized representative to act for you in this appeal,
it will be heard and decided in your absence.
Date…………. Signature of the Appellate authority with seal
Form IX
(See clause (iii) of sub rule (1) of Rule 51)
ATTENDANCE REGISTER CUM MUSTER ROLL
Name of the Establishment
Name of the Employer
Name of the Owner
Registration Number of the
establishment
(Labour Identification Number (LIN) shall be
the Registration Number of the
Establishment)
For the Month of
Sl. No. Employee Name Designation Shift Place of
Code work/Section/Department
(1) (2) (3) (4) (5) (6)
Date and Time of attendance
(7)
Date 1 2 3 4 5 6 7 8 9 10 11
In Out In Out In Out In Out In Out In Out In Out In Out In Out In Out In Out
Time
Signature
Date 12 13 14 15 16 17 18 19 20 21
In Out In Out In Out In Out In Out In Out In Out In Out In Out In Out
Time
Signature
Date 22 23 24 25 26 27 28 29 30 31
In Out In Out In Out In Out In Out In Out In Out In Out In Out In Out
Time
Signature
Total number Total number of Brief details of tour or Signature of
of days worked overtime hours assignment Register
worked outside the work place, if any keeper*
(8) (9) (10) (11)
*Note: Required in case register is maintained physically.
Appendix A
[See rules 22, 23, 27 and 28]
In this Appendix, the total amount of bonus equal to 8.33 per cent of the annual salary or wage payable to all the employees is
assumed to be Rs. 1,04,167. Accordingly, the maximum bonus to which all the employees are entitled to be paid (twenty per
cent of the annual salary or wage of all the employees) would be Rs. 2,50,000.
Year Amount equal to sixty per cent. or Amount payable as bonus Set on or Set Total set on
sixty- off of the year or set
seven per cent., as the case may be, of carried forward off
available surplus allocable as bonus carried
forward
(1) (2) (3) (4) (5) (6)
Rs. Rs. Rs. Rs. Of
(year)
1. 1,04,167 1,04,167** Nil Nil
2. 6,35,000 2,50,000* Set on Set on (2)
2,50,000* 2,50,000*
3. 2,20,000 2,50,000* (inclusive of Nil Set on (2)
30,000 from year-2) 2,20,000
4. 3,75,000 2,50,000* Set on Set on
1,25,000 2,20,000 (2)
1,25,000 (4)
5. 1,40,000 2,50,000* (inclusive of Nil Set on
1,10,000 from year-2) 1,10,000 (2)
1,25,000 (4)
6. 3,10,000 2,50,000* Set on Set on
60,000 Nil + (2)
1,25,000 (4)
60,000 (6)
7. 1,00,000 2,50,000* (inclusive of Nil Set on
1,25,000 from year-4 and 35,000 (6)
25,000 from year-6)
8. Nil 1,04,167**(inclusive of Set off Set off (8)
35,000 from year-6) 69,167 69,167
(due to loss)
9. 10,000 1,04,167** Set off Set off
94,167 69,167 (8)
94,167 (9)
10. 2,15,000 1,04,167** (after setting Nil Set off (9)
off 69,167 from year-8 52,501
and 41,666 from year-9)
* Maximum.
+ The balance of Rs. 1,10,000 set on from year-2 lapses.
** Minimum
Appendix B
COMPUTATION OF GROSS PROFITS
[See rule 24] Accounting year ending .........
Item Particulars Amount of sub- Amount of Remarks
No. Items main Items
Rs. Rs.
(1) (2) (3) (4) (5)
*1. Net Profit as shown in the Profit and Loss Account after making
usual and necessary provisions.
2. Add back provision for:
(a) Bonus to employees
(b) Depreciation
(c) Development Rebate Reserve See foot-
(d) Any other reserves note(1)
Total of Item No. 2……….. Rs…………
See foot-
note(1)
3. Add back also:
(a) Bonus paid to employees in respect of previous accounting See foot-
years. note(1)
(b) The amount debited in respect of gratuity paid or payable
to employees in excess of the aggregate of –
(i) the amount, if any, paid to, or provided for payment to, an
approved gratuity fund; and
(ii) the amount actually paid to employees on their retirement
or on termination of their employment for any reason.
(c) Donations in excess of the amount admissible for income-tax
.
(d) Capital expenditure (other than capital expenditure on
scientific research which is allowed as a deduction under any
law for the time being in force relating to direct taxes) and
capital losses (other than losses on sale of capital assets on
which depreciation has been allowed for income tax).
(e) Any amount certified by the Reserve Bank of India in terms See foot-
of sub-section (2) of section 34A of the Banking Regulation Act, note(1)
1949 (10 of 1949).
(f) Losses of, or expenditure relating to, any business situated
outside India.
Total of Item No.3………..
Rs……….
4. Add also income, profits or gains (if any ) credited directly
to
published or disclosed reserves, other than-
(i) capital receipts and capital profits (including profits on the
sale of capital assets on such depreciation has not been allowed
for income-tax);
(ii) profits of, and receipts relating to , any business situated
outside India;
(iii) income of foreign banking companies from investment
outside India.
Net total of Item No.4…….
Rs…………
5. Total of Item Nos.1, 2, 3 and 4… Rs…………
6. Deduct :
(a) Capital receipts and capital profits (other than profits on the See foot-
sale of assets on which depreciation has been allowed for note (2)
income-tax).
(b) Profits of, and receipts relating to any business situated
outside India.
(c) Income of foreign banking companies from investments See foot-
outside India . note (2)
(d) Expenditure or losses (if any ) debited directly to published
or disclosed reserves, other than – See foot-
note (2)
(i) capital expenditure and capital losses (other than losses on
sale of capital assets on which depreciation has not been
allowed for income-tax );
(ii) losses of any business situated outside India.
See foot-
note (3)
(e) In the case of foreign banking companies proportionate
administrative (overhead) expenses of head-office allocable to
Indian business.
See foot-
(f) Refund of any excess direct tax paid for previous accounting note (2)
years and excess provision if any of previous accounting years,
relating to bonus, depreciation or development rebate, if
written back.
(g) Cash subsidy, if any, given by the government or by anybody
corporate established by any law for the time being in force or See foot-
by any other agency through budgetary grants, whether given note (2)
directly or through any agency for specified purposes and the
proceeds of which are reserved for such purposes .
Total of Item No. 6 ……
Rs……………..
7. Gross profits for purposes of bonus (Item No. 5 minus Item No. Rs……………..
6)
Explanation.— In sub-item (b) of Item 3, "approved gratuity fund" has the same meaning assigned to it in clause (5) of
section 2 of the Income Tax Act,1961.
* Where the profit subject to taxation is shown in the Profit and Loss account and the provision made for taxes on income is
shown, the actual provision for taxes on income shall be deducted from the profit.
Foot-note:-
(1) If, and to the extent, charged to Profit and Loss Account.
(2) If, and to the extent, credited to Profit and Loss Account.
(3) In the proportion of Indian Gross Profit (Item No. 7) to Total World Gross Profit (as per consolidated profit and loss
account adjusted as in Item No. 2 above only)]
Appendix C
COMPUTATION OF GROSS PROFITS
[(See rule 25)] Accounting year ending……………
Item Particulars Amount. Of sub- Amount. Remarks
Items Of main
No. Items
Rs. Rs.
(1) (2) (3) (4) (5)
1. Net profit as per profit and loss account
2. Add back provision for :
(a) Bonus to employees
(b) Depreciation.
(c) Direct taxes, including the provision (if any), for
previous accounting years
(d) Development rebate / investment allowance / development See foot-
allowance reserve. note (1)
(e) Any other reserves
Total of Item No.2……..
See foot-
note (1)
Rs………………
3. Add back also :
(a) Bonus paid to employees in respect of previous accounting See foot-
years. note (1)
(aa) The amount debited in respect of gratuity paid or payable
to employees in excess of the aggregate of-
(i) the amount, if any, paid to, or provided for payment to,
an approved gratuity fund; and
(ii) the amount actually paid to employees on their retirement or
on termination of their employment for any reason.
(b) Donations in excess of the amount admissible for income-tax .
(c) Any annuity due, or commuted value of any annuity paid, under
the provisions of section 280D of the Income Tax Act during the
accounting year.
(d) Capital expenditure (other than capital expenditure on scientific
research which is allowed as a deduction under any law for the time
being in force relating to direct taxes) and capital losses (other than
losses on sale of capital assets on which depreciation has been
allowed for income tax or agricultural income-tax.).
See foot-
(e) Losses of , or expenditure relating to, any business situated note (1)
outside India.
Total of Item No.3………..
Rs………..
4. Add also income, profits or gains (if any) credited directly
to
reserves, other than-
(i) capital receipts and capital profits (including profits on the sale
of capital assets on which depreciation has not been allowed for
income-tax or agricultural income-tax);
(ii) profits of, and receipts relating to, any business situated outside
India;
(iii) income of foreign concerns from investments outside India.
Net total of Item No.4……..
Rs…………..
5. Total of Item Nos. 1,2,3 and 4… Rs…………..
6. Deduct :
(a) Capital receipts and capital profits (other than profits on the sale See foot-
of assets on which depreciation has been allowed for income-tax or note (2)
agricultural income-tax).
(b) Profits of, and receipts relating to, any business situated
outside
India.
(c) Income of foreign concerns from investment outside India. See foot-
note (2)
(d) Expenditure or losses (if any ) debited directly to reserves, other
than- See foot-
note (2)
(i) capital expenditure and capital losses (other than losses on sale
of capital assets on which depreciation has not been allowed for
income-tax ; or agricultural income-tax;
(ii) losses of any business situated outside India.
(e) In the case of foreign concerns proportionate
administrative (overhead) expenses of head office allocable to
Indian business.
(f) Refund of any direct tax paid for previous accounting years and
excess provision, if any, of previous accounting years relating to
bonus, depreciation, taxation or development rebate or
development allowance, if written back.
(g) Cash subsidy, if any, given by the government or by any body See foot-
corporate established by any law for the time being in force or by note (3)
any other agency through budgetary grants, whether given directly
or through any agency for specified purposes and the proceeds of
which are reserved for such purposes.
Total of Item No.6 See-foot-
note (2)
7. Gross Profits for purposes of bonus (Item No.5 minus Item No.6 ) Rs……………
Explanation.— In sub-item (aa) of Item 3, "approved gratuity fund" has the same meaning assigned to it in clause (5) of
section 2 of the Income Tax Act, 1961.
Foot-note:-
(1) If, and to the extent, charged to Profit and Loss Account.
(2) If, and to the extent, credited to Profit and Loss Account.
In the proportion of Indian Gross Profit (Item No. 7) to Total World Gross Profit (as per consolidated Profit
and Loss Account, adjusted as in Item No. 2 above only)
Appendix D
[See rule 26]
Item Category of Further sums to be deducted
No. employer
(1) (2) (3)
1. Company, (i) The dividends payable on its preference share capital for the accounting year calculated
other than at
a banking the actual rate at which such dividends are payable;
company.
(ii) 8.5 percent of its paid up equity share capital as at the commencement of the
accounting year;
(iii) 6 percent of its reserves shown in its balance sheet as at the commencement of
the accounting year, including any profits carried forward from the previous accounting
year :
Provided that where the employer is a foreign company within the meaning of section 2 (42)
of the Companies Act ,2013 (18 of 2013) , the total amount to be deducted under this item
shall be 8.5 percent on the aggregate of the value of the net fixed assets and the current
assets of the company in India after deducting the amount of its current liabilities (other
than any amount shown as payable by the company to its Head Office whether towards any
advance made by the Head Office or otherwise or any interest paid by the company to its
Head Office ) in India.
2. Banking (i) The dividends payable on its preference share capital for the accounting year calculated
company at
the rate at which such dividends are payable ;
(ii) 7.5 per cent of its paid up equity share capital as at the commencement of the
accounting year ;
(iii) 5 percent of its reserves shown in its balance sheet as at the commencement of
the accounting year, including any profits carried forward from the previous accounting
year;
(iv) any sum which, in respect of the accounting year, is transferred by it-
(a) to a reserve fund under sub-section (1) of section 17 of the Banking Regulation Act,
1949 (10 of 1949 ); or
(b) to any reserves in India in pursuance of any direction or advice given by the
Reserve Bank of India,
whichever is higher:
Provided that where the banking company is a foreign company within the meaning of section
2 (42) of the Companies Act , 2013 (18 of 2013 ), the amount to be deducted under this item
shall be the aggregate of-
(i) the dividends payable to its preference shareholders for the accounting year at the rate
at
which such dividends are payable on such amount as bears the same proportion to its total
preference share capital as its total working funds in India bear to its total world working
funds;
(ii) 7.5 per cent of such amount as bears the same proportion to its total paid up equity share
capital as its total working funds in India bear to its total working funds.
(iii) 5 per cent of such amount as bears the same proportion to its total disclosed reserves as
its total working funds in India bear to its total world working funds;
(iv) any sum which, in respect of the accounting year, is deposited by it with the Reserve
Bank of India under sub-clause (ii) of clause (b) of sub-section (2) of section 11 of the Banking
Regulation Act, 1949 (10 of 1949) , not exceeding the amount required under the aforesaid
provision to be so deposited.]
3. Corporation (i) 8.5 per cent of its paid up capital as at the commencement of the accounting year;
(ii) 6 per cent of its reserves, if any, shown in its balance sheet as at the commencement
of the accounting year, including any profits carried forward from the previous accounting
year.
4. Co- (i) 8.5 per cent of the capital invested by such society in its establishment as evidenced
operative from
society its books of accounts at the commencement of the accounting year;
(ii) such sums as has been carried forward in respect of the accounting year to a
reserve
fund under any law relating to co-operative societies for the time being in force.
5. Any 8.5 per cent of the capital invested in the establishment as evidenced from his books
othe of accounts at the commencement of the accounting year:
r
employer Provided that where such employer is a person to whom Chapter XXII-A of the income Tax
not Act applies , the annuity deposit payable under the provisions of that Chapter during the
fallin accounting year shall also be deducted:
g
under any Provided further that where such employer is a firm, an amount equal to 25 per cent of the
of the gross profits derived by it from the establishment in respect of the accounting year after
aforesaid deducting depreciation in accordance with the provisions of clause (a) of section 34 by way
categories of remuneration to all the partners taking part in the conduct of business of the
establishment shall also be deducted, but where the partnership agreement, whether oral
or written, provides for the payment of remuneration to any such partner, and –
(i) the total remuneration payable to all such partners is less than the said 25 per cent the
amount payable, subject to a maximum of five lakh rupees to each such partner; or
(ii) the total remuneration payable to all such partners is higher than the said 25 percent ,
such percentage, or a sum calculated at the rate of five lakh rupees to each such partner,
whichever is less , shall be deducted under this proviso:
Provided also that where such employer is an individual or a Hindu Undivided Family -
(i) an amount equal to 25 per cent of the gross profits derived by such employer from the
establishment in respect of the accounting year after deducting depreciation in accordance
with the provisions of clause (a) of section 34; or
(ii) five lakh rupees,
whichever is less by way of remuneration to such employer, shall also be deducted.
Explanation.— The expression "reserves" occurring in column (3) against Item Nos. 1(iii), 2(iii) and 3(ii) shall not include any
amount set apart for the purpose of-
(i) payment of any direct tax which, according to the balance-sheet, would be payable;
(ii) meeting any depreciation admissible in accordance with the provisions of clause (a) of section 34;
(iii) payment of dividends which have been declared, but shall include,-
(a) any amount, over and above the amount referred to in clause-(i) of this Explanation, set apart as specific
reserve for the purpose of payment of any direct tax; and
(b) any amount set apart for meeting any depreciation in excess of the amount admissible in accordance
with the provisions of clause (a) of section 34.
[F. No. P-11023/03/2025-WC]
TEJASWI S. NAIK, Jt. Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
SARVESH KUMAR Digitally signed by SARVESH
KUMAR SRIVASTAVA
and Published by the Controller of Publications, Delhi-110054. SRIVASTAVA Date: 2026.05.08 20:12:08 +05'30'Application and evidence
- Primary statutory test — (1) An accused person desirous of composition of offence under sub-section (1) of section 56 may make an application in Form VI electronically or manually to the Gazetted Officer notified under said sub-section.
- Additional operative limb — (2) The Gazetted Officer referred to in sub-rule (1) shall on receipt of such application, satisfy as to whether the offence is compoundable or not under the Code and, if the offence is compoundable and the accused person agrees for the composition, compound the offence for a sum of fifty per cent of the maximum fine provided for such offence under the Code, to be paid by the accused within thirty days of the order of…
- Qualification / exception to test — Provided that where the employer is a foreign company within the meaning of section 2
- Numerical or timing control — (2) The Gazetted Officer referred to in sub-rule (1) shall on receipt of such application, satisfy as to whether the offence is compoundable or not under the Code and, if the offence is compoundable and the accused person agrees for the composition, compound the offence for a sum of fifty per cent of the maximum fine provided for such offence under the Code, to…
- Code Section mapping — 53, 56. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
- Prescribed-form link recorded in the corpus — VI. Confirm the current notified form/version before filing.
Cross-references & prescribed forms
Sections cited/mapped
Forms
VI
Worked example
When an event triggers manner of composition of offences, record the trigger date, competent authority, prescribed rule/form, filing or decision step, service/acknowledgement and final outcome. A statutory point to test is: “(2) The Gazetted Officer referred to in sub-rule (1) shall on receipt of such application, satisfy as to whether the offence is compoundable or not under the Code and, if the offence is compoundable and the accused person agrees for the composition, compound the offence for a sum of fi” Also test the express qualification/proviso before concluding the result. Reconcile the mapped Code Section(s) 53, 56. Use the current notified VI where the process requires it.
Illustrative only. Use the exact notified rule, prescribed form and competent authority.
Q&A — Rule 54
What is Rule 54 of the Code on Wages (Central) Rules, 2026?
Rule 54 — Governs manner of composition of offences and the rights, duties, powers or procedure expressly stated in this rule. Key operative text: (1) An accused person desirous of composition of offence under sub-section (1) of section 56 may make an application in Form VI electronically or manually to the Gazetted Officer notified under said sub-section.
What does Rule 54 require or permit?
A principal operative clause extracted from the notified rule is: “(1) An accused person desirous of composition of offence under sub-section (1) of section 56 may make an application in Form VI electronically or manually to the Gazetted Officer notified under said sub-section.” Read it with all sub-rules and provisos below.
Does Rule 54 contain a proviso or explanation?
Yes. One extracted qualification is: “Provided that where the employer is a foreign company within the meaning of section 2”
What deadline, period, percentage or amount appears in Rule 54?
The rule contains this numerical/time expression: “(2) The Gazetted Officer referred to in sub-rule (1) shall on receipt of such application, satisfy as to whether the offence is compoundable or not under the Code and, if the offence is compoundable and the accused person agrees for the composition, compound the offence for a sum of fifty per cent of the maximum fine provided for such offence under the Code, to…” Apply it only in its notified context.
Which Code sections are linked to Rule 54?
The current concordance maps Rule 54 to Section(s) 53, 56.
Which form is connected with Rule 54?
The current corpus records: VI. Confirm the current notified version before use.
When did Rule 54 come into force?
The final Central Rules were notified as G.S.R. 343(E), 8 May 2026; Rule 1 states that the Rules come into force on publication. Check any later amendment or corrigendum before reliance.
Primary sources
Code on Wages (Central) Rules, 2026 — official Gazette PDF ↗
Code on Wages, 2019 — India Code ↗
Source check: 20 August 2026.
Jurisdiction note: This is the Central Rule corpus. Check State rules/notifications where the State Government is the appropriate Government and check later Gazette amendments before acting.