Sections 46 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 46 treats certain bonus disputes as industrial disputes. Section 47 helps the company or corporation in the dispute: its duly audited balance sheet and profit and loss account may be presumed accurate, but a union or the employees can ask for clarification of any item. Together they set the evidence ground rules for bonus disputes.
A dispute between an employer and employees about fixation of bonus or eligibility for bonus, or about applying the bonus provisions to a public sector establishment, is deemed an industrial dispute within the meaning of the Industrial Disputes Act, 1947 (s.46). In proceedings on such disputes, a duly audited balance sheet and profit and loss account of a corporation or company (other than a banking company) may be presumed accurate without an affidavit; the authority may still check where it is not satisfied (s.47(1)). A trade union or employees may ask for clarification of any item, and the authority may direct the company to furnish it (s.47(2)).
Section 46: which bonus disputes are industrial disputes
"Notwithstanding anything contained in this Code", a dispute between an employer and his employees with respect to:
- (a) fixation of bonus or eligibility for payment of bonus under the Code; or
- (b) the application of the Code, in respect of bonus, to an establishment in the public sector,
"shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act, 1947."
The text cites the Industrial Disputes Act, 1947 by name. It does not say here how a reference or adjudication is to run, or which body decides. Read the dispute-resolution framework that applies to your establishment, including the Tribunal and arbitrator mentioned in section 47. This article does not describe those procedures, as they are outside the text read.
Note what section 46 does not cover. A claim that an employee has simply not been paid bonus already due is a claim, to be made to the authority under section 45. The deeming rule in section 46 is for disputes about fixation or eligibility and about public sector application. For the public sector bonus provision, see section 40. For a dispute about the Code itself, such as the eligibility conditions, the underlying rules are in section 26. If a bonus dispute has reached you, our legal dispute resolution service can help you structure the evidence.
Section 47(1): the presumption
Section 47 applies "during the course of proceedings" before any of four bodies:
- the authority under section 45;
- the appellate authority under section 49;
- a Tribunal; or
- an arbitrator referred to in clause (aa) of section 2 of the Industrial Disputes Act, 1947,
in respect of "any dispute of the nature specified in sections 45 and 46 or in respect of an appeal under section 49". If the balance sheet and profit and loss account of an employer that is a corporation or a company (other than a banking company), "duly audited by the Comptroller and Auditor-General of India or by auditors duly qualified to act as auditors of companies under section 141 of the Companies Act, 2013", are produced, the body "may presume the statements and particulars contained in such balance sheet and profit and loss account to be accurate". The company need not prove accuracy "by the filing of an affidavit or by any other mode".
| Element | What the text says |
|---|---|
| Who gets the presumption | Corporation or company, not a banking company |
| Audit condition | Audited by the CAG, or by auditors qualified under section 141 of the Companies Act, 2013 |
| Effect | The body may presume accuracy; no affidavit or other proof needed |
| Limit (proviso) | If satisfied the statements are not accurate, the body may take such steps as it thinks necessary to find out accuracy |
The word is "may presume": the presumption is not compulsory, and it is open to rebuttal through the proviso. For employers, the practical point is to produce the audited statements promptly. For employees and unions, the proviso and sub-section (2) are the tools to test them.
Section 47(2): clarification of items
A Trade Union that is a party to the dispute (or an appeal) or, where there is no Trade Union, the employees who are parties, may apply for clarification relating to any item in the balance sheet or profit and loss account. After the body is satisfied that the clarification is necessary, it may by order direct the corporation or company to furnish it to the union or employees within the time specified, and the corporation or company "shall comply".
Hypothetical example. A company shows a large "other expenses" line. The union applies, and the authority, satisfied that the item affects the bonus computation, directs the company to explain the items within 15 days. The company supplies a note signed by its finance head. The figures and period are invented to illustrate the step.
Drafting note
Section 47(1) speaks of a dispute "of the nature specified in sections 45 and 46". Section 45 concerns claims under the Code generally, so the presumption is available in any claim before the authority where the employer is a company, not only in bonus matters. Read the text carefully before assuming that the presumption is confined to bonus.
What the Central Rules add
The Code on Wages (Central) Rules, 2026 (G.S.R. 343(E), 8 May 2026) apply only where the Central Government is the appropriate Government. Where the State Government is the appropriate Government, the State's own wage rules apply. In the Rules text read for this article, no rule adds to sections 46 or 47. The Rules' bonus computation material is in the appendices; see the appendices article. For employers that are not companies or corporations, see section 48.
Need help with a bonus dispute?
Bonus disputes are won or lost on accounts and eligibility records. If you are on either side of one, our legal dispute resolution team can help you prepare the audited statements, frame clarification requests and respond to directions.
Key takeaways
- Disputes on fixation or eligibility for bonus, and on applying the bonus provisions to the public sector, are deemed industrial disputes (s.46).
- Audited accounts of a company or corporation, other than a banking company, may be presumed accurate (s.47(1)).
- The authority can verify accuracy if not satisfied (proviso).
- A union, or the employees where there is no union, can ask for clarification of any item and the authority may direct the company to give it (s.47(2)).
Read next
- Section 48: audit of accounts of non-corporate employers
- Section 45: claims and procedure
- Section 40: bonus in public sector establishments
- Bonus under the new labour codes
Disclaimer: Based on the Code on Wages, 2019 (as enacted) and, where noted, the Code on Wages (Central) Rules, 2026 (G.S.R. 343(E), 8 May 2026), as on 1 October 2026. The Code is in force from 21 November 2025; State Governments make their own rules for establishments where the State is the appropriate Government, and wage rates are notified separately. Verify the current position before acting.