Section 5: Bonus to be Distributed by the Profit-Making Enterprise

1) Each profit-making enterprise shall have to allocate an amount equivalent to ten percent of its net income of one fiscal year for a bonus to the employees.

2) While assessing the net income of any enterprise derived in any one fiscal year pursuant to sub-section (1), the following amounts shall have to be deducted from the net income assessed pursuant to the Income Tax Act, 2058:

(a)

(b)

(c) The bonus amount distributed excessively under sub-section (3) of Section 11.

3) Notwithstanding anything contained in Sub-section (1), the percentage of bonus and other matters relating to bonus which is to be distributed by the Government-owned enterprises shall be as determined by the Government of Nepal.

3A) Notwithstanding anything contained in sub-sections (1) and (3), an enterprise owned by the Government of Nepal established for the promotion of any sector without the objective of earning profit shall not be entitled to distribute a bonus.

3B) Notwithstanding anything contained in sub-sections (1) and (3), an enterprise owned by the Government of Nepal shall be entitled to distribute bonus only in the following circumstances:

(a) The amount of expenditure recorded on the accrual basis shall have been paid within the next financial year,

(b) The amount of contingent liabilities for each financial year shall have been determined, and the amount so determined shall have been set up and deposited in a separate fund.

(c) If any loan has been taken from the Government of Nepal or with the guarantee of the Government of Nepal, such loan amount shall have been repaid in accordance with the payment schedule mentioned in the agreement made at the time of taking the loan.

3C) Except for the matters mentioned in this Act and the regulations made under this Act, other matters relating to the distribution of bonus shall be as decided by the Government of Nepal.

4) ¹……………….

^{1 Omitted by the Fourth Amendment.}