As per employment law in India, the time limit for payment of Bonus is fixed under the Payment of Bonus Act, 1965
Section 19 of the Payment of Bonus Act, 1965 states as follows –
‘All amounts payable to an employee by way of Bonus under this Act shall be paid in cash by his employer –
(a) Where there is a dispute regarding payment of bonus pending before any authority under Sec.22, within a month from the date on which the award becomes enforceable or the settlement comes into operation, in respect of such dispute;
(b) In any other case, within a period of eight months from the close of the accounting year:
Provided that the appropriate Government or such authority as the appropriate Government may specify in this behalf may, upon an application made to it by the employer and for sufficient reasons, by order, extend the said period of eight months to such further period or periods as it thinks fit; so, however, that the total period so extended shall not in any case exceed two years.’
As per the Payment of Bonus Act, in case of an award on dispute or settlement on dispute, the Bonus is payable within a month from the date of award becomes enforceable or settlement comes into operation. In other cases, within a period of 8 months from the close of the accounting year.
Proviso to Section 19 allows an employer to approach the appropriate government or such other authority for extension of period of 8 months for sufficient reasons. Therefore if the employer has financial difficulties which can be explained with elaborate details or such other reasons, the employer can seek extension of the period of 8 months. Each case for extension shall be examined by the Government or the authorities on its own merits.