Section 48 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 48 handles bonus disputes where the employer is not a corporation or a company, such as a proprietor or a partnership. If audited accounts are produced, the balance sheet presumption in section 47 applies to them. If they are not audited, the deciding body can order an audit, and even get it done itself at the employer's cost. A payroll compliance audit before the dispute starts helps an employer be ready for this.
The section applies where a claim, dispute or appeal on bonus is pending between an employer who is not a corporation or company and his employees, before an authority, appellate authority, Tribunal or arbitrator (s.48(1)). If accounts audited by a company-qualified auditor (section 141 of the Companies Act, 2013) are produced, section 47 applies to them. If not audited, the body may direct the employer to get the accounts audited within a specified time (s.48(2)). On failure, it may get the audit done itself, without prejudice to section 54, and the expenses are payable by the employer and recoverable like a claim (s.48(3), (5)).
Sub-section (1): audited accounts produced
Where a "claim, dispute or appeal with respect to bonus payable under this Code between an employer, not being a corporation or a company, and his employees is pending" before any of the four bodies named in section 47(1) (the authority under section 45, the appellate authority under section 49, a Tribunal or an arbitrator), and the accounts of the employer are produced after being "audited by any auditor duly qualified to act as auditor of companies under the provisions of section 141 of the Companies Act, 2013", then "the provisions of section 47 shall, so far as may be, apply to the accounts so audited."
In plain terms: audited accounts of a sole proprietor or a partnership get the same treatment as a company's audited accounts. They may be presumed accurate, the body can verify them if not satisfied, and a union or the employees can seek clarification of items. See sections 46 and 47.
Section 48(1) refers only to bonus matters. It says "claim, dispute or appeal with respect to bonus payable under this Code", unlike section 47, which also refers to disputes of the nature in sections 45 and 46 generally.
Sub-section (2): order to get accounts audited
If the body "finds that the accounts of such employer have not been audited by any such auditor" and "is of opinion that an audit of the accounts of such employer is necessary for deciding the question referred to it", it may by order direct the employer to get his accounts audited within the time specified, or within such further time as it may allow, by such auditor or auditors as it thinks fit. The employer "shall comply with such direction".
Two conditions apply: the accounts are not audited by a qualified auditor, and the body forms an opinion that an audit is necessary. The body, not the employer, chooses the auditor ("by such auditor or auditors as it thinks fit").
Sub-sections (3) to (5): failure, effect and cost
| Sub-section | What it says |
|---|---|
| (3) | If the employer fails to get the accounts audited under (2), the body may, without prejudice to section 54, get the accounts audited by auditors it thinks fit |
| (4) | When accounts are audited under (2) or (3), section 47 applies to them so far as may be |
| (5) | The expenses of, and incidental to, an audit under (3), including the remuneration of the auditors, are determined by the body and paid by the employer; in default they are recoverable by the authority referred to in section 45(3) from the employer in the manner provided in that sub-section |
"Without prejudice to section 54" means the penalty provisions remain available. Section 54 is covered in our article on penalties; the text of s.48 does not say which clause of s.54 would apply, and it does not give any amount. Whether failure to comply with the audit direction is an offence is a question for that section's wording ("contravenes any other provision of this Code or any rule made or order made or issued thereunder"), and legal advice should be taken.
Note that sub-section (5) mentions the cost of an audit under sub-section (3) only, where the body itself gets the audit done. The text does not say who bears the cost of an audit the employer arranges under sub-section (2); that is naturally the employer's own expense, but it is not stated.
Hypothetical example. A partnership firm with 25 employees is in a bonus dispute. It produces unaudited accounts. The authority, finding an audit necessary, directs the firm to get its accounts audited by a named chartered accountant within 45 days. The firm does not comply. The authority appoints the auditor, fixes the audit expenses at an invented Rs 60,000 and orders the firm to pay. If unpaid, the sum can be recovered through the section 45(3) route (a recovery certificate to the Collector or District Magistrate). The figures are invented.
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 section 48. For the appendices that deal with the bonus computation itself, see the appendices article.
Practical points for employers who are not companies
- Keep accounts audit-ready. The dispute is the wrong time to discover that the books are incomplete.
- Use a qualified auditor. The text refers to an auditor "duly qualified to act as auditor of companies" under section 141 of the Companies Act, 2013.
- Meet the time in the direction. The body may extend it ("such further time as it may allow"); ask early.
- Preserve the wage and bonus records required by section 50.
The same logic applies to employees and unions: ask the body to direct an audit where accounts are unaudited and the bonus computation turns on them.
Need help getting accounts and payroll dispute-ready?
If you run a proprietorship or partnership and a bonus claim is possible, the combination of audited accounts and clean payroll records is your strongest protection against a body-ordered audit. Our payroll compliance audit team can check bonus workings, wage registers and the records likely to be asked for.
Key takeaways
- Section 48 covers bonus claims, disputes and appeals where the employer is not a corporation or company.
- Audited accounts (by a company-qualified auditor) get the section 47 presumption and clarification treatment.
- Unaudited accounts can lead to an order to get them audited, and, on default, an audit by the body itself.
- The audit expenses of a body-ordered audit are fixed by the body, paid by the employer and recoverable as in section 45(3).
- Section 54 remains available.
Read next
- Sections 46 and 47: bonus disputes and presumption about balance sheet
- Section 49: appeal
- Section 50: records, returns and notices
- Bonus Act compliance checklist for employers
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.