Section 32: Computation of gross profits

Requires gross profit to be computed in the prescribed manner for banking and non-banking establishments.

Operative frameworkSource review: 16 July 20262 linked Central Rule(s)

Statutory identity

ProvisionSection 32

Subjectstatutory bonus

Primary authorityAppropriate Government / employer / notified authority, according to the provision

Official textOpen section ↗

What the provision requires

Requires gross profit to be computed in the prescribed manner for banking and non-banking establishments.

Implementation control: Use the correct statutory schedule/appendix and reconcile the computation to audited financial statements.

Provision-level reading sequence

Read each subsection, clause, proviso and explanation in the official text.
Apply section 2 definitions before testing the obligation or exception.
Identify the appropriate Government and the applicable Central or State rule.
Check commencement, section-specific notifications and saved predecessor-law instruments.
Document the factual test and the evidence supporting the conclusion.

Provision map — subsection, clause and qualification

This map decomposes the section into its operative tests. Use the linked India Code text for exact numbering and wording.

Employer type

Use the prescribed computation for a banking company or for another establishment.

Appendices

Central Rules 24–25 and the relevant appendices provide the computation format.

Audit bridge

Reconcile statutory gross profit to audited accounts.

Linked Code on Wages (Central) Rules, 2026

Central Rule 24

Computation of gross profits for banking company

Exact rule text, paragraph map, forms and compliance controls.

Central Rule 25

Computation of gross profits for other than banking company

Exact rule text, paragraph map, forms and compliance controls.

Authority, form and filing map

AuthorityAppropriate Government / employer / notified authority

Central forms detectedNo prescribed form is expressly referenced in the linked Central Rule text detected for this section. Verify State rules and later notifications.

State overlayCheck State rules where State Government is appropriate

Review date16 July 2026

Evidence pack

audited financial statements
employee eligibility and attendance data
gross/available/allocable surplus workbook
set-on/set-off ledger and payment proof

Compliance consequence

Incorrect eligibility, computation or timing may create bonus arrears, claims, recovery and penalty exposure.

Remedy path: identify the claims authority, appellate authority, adjudicating officer, Inspector-cum-Facilitator or criminal court applicable to the issue.

Worked example

Before acting on computation of gross profits, the employer records the applicable Government, employee category, operative instrument, calculation or procedural step, reviewer approval and evidence of completion.

Illustrative only. Apply actual wage notifications, contracts, dates, State rules and evidence.

Practical Q&A

Can an employment contract override this section?

Not where the contract reduces a statutory entitlement. Sections 60 and 61 must be considered, including any more favourable award, agreement or contract.

What should be checked before payroll or HR action?

Confirm coverage, appropriate Government, operative rate/order, the exact subsection and proviso, linked rule, evidence, approval and payment/filing deadline.

Primary sources

India Code — exact Section 32 text ↗

India Code — official consolidated Act PDF ↗

Ministry of Labour — Codes, Rules, notifications and FAQs ↗

Last official-source review: 16 July 2026.

Reliance note: Read the current Gazette/India Code text, the applicable Central or State rules and later notifications before acting. This repository is educational and does not replace matter-specific legal advice.