Section 35: Calculation of direct tax payable by employer

What the provision requires

Prescribes how direct tax is calculated for bonus purposes, including adjustments for bonus and certain tax reliefs.

Implementation control: Prepare a tax computation specifically for the bonus calculation rather than copying the income-tax provision figure.

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.

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.