Payment of Wages Act,1936
Act No : 4
Section : DEDUCTIONS WHICH MAY BE MADE FROM WAGES
SECTION 07: DEDUCTIONS WHICH MAY BE MADE FROM WAGES
(1) Notwithstanding the provisions of sub-section (2) of Section 47 of the Indian Railways Act', 1890 (9 of 1890), the wages of an employed person shall be paid to him without deduction of any kind except those authorised by or under this Act.
1[Explanation I] Every payment made by the employed person to the employer or his agent shall, for the purposes of this Act, be deemed to be a deduction from wages.
2[Explanation II] Any loss of wages resulting from the imposition, for good and sufficient cause, upon a person employed of any of the following penalties, namely
(i) the withholding of increment or promotion (including the stoppages of increment at an efficiency bar);
(ii) the reduction to a lower post or time-scale or to a lower stage in a time-scale; or
(iii) suspension; shall not be deemed to be a deduction from wages in any case where the rules framed by the employer for the imposition of any such penalty are in conformity with the requirements if any, which may be specified in this behalf by the State Government by notification in the Official Gazette.
(2) Deduction from the wages of an employed person shall be made only in accordance with the provisions of this Act, and may be of the following kinds only, namely
(a) fines;
(b) deduction for absence from duty;
(c) deductions for damage to or loss of goods expressly entrusted to the employed person for custody or for loss of money for which he is required to account where such damage or loss is directly attributable to his neglect or default;
3[(d) deductions for house-accommodations supplied by the employer or by Government or any housing board set up under any law for the time being in force (whether the Government or the board is the employer or not) or any other authority engaged in the business of subsiding house-accommodation which may be specified in this behalf by the State Government by notification in the Official Gazette];
(e) deductions for such amenities and services supplied by the employer as the 4[*****] -5[State] Government 6[or any officer specified by it in this behalf] may, by general or special order authorise
Explanation.- The word "services" in 7[this clause] does not include the supply of tools and raw materials required for the purposes of employment;
8[(f) deductions for recovery of advances of whatever nature (including advances for travelling allowance or conveyance allowance), and the interest due in respect thereof or for adjustment of over-payment of wages;
(ff) deductions for recovery of loans made from any fund constituted for the welfare of labour in accordance with the rules approved by the State Government, and the interest due in respect thereof;
(fff) deductions for recovery of loans granted for house building or other purposes approved by the State Government and the interest due in respect thereof
(g) deductions of income-tax payable by the employed person;
(h) deductions required to be made by order of Court or other authority competent to make such order;
(i) deductions for subscriptions to, and for repayment of advances from any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies or any recognised provident fund as defined in Section 58-A of the Indian Income Tax Act, 1922 (11 of 1922), or any provident fund approved in this behalf by the 9[State] Government during the continuance of such approval;
10[*****]
(j) deductions for payment to cooperative societies approved by the 11[State] Government 12[or any officer specified by it in this behalf] or to a Scheme of insurance maintained by the Indian Post Office
13[***]
14[(k) deductions, made with the written authorisation of the person employed for payment of any premium on his life insurance policy to the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), or for the purchase of securities of the Government of India or of any State Government or 15[****] in furtherance of any savings scheme of any such Government]
16[(kk) deductions made, with the written authorisation of the employed person, for the payment of his contribution to any fund constituted by the employer or a trade union registered under the Trade Unions Act, 1926 (16 of 1926), for the welfare of the employed persons or the members of their families, or both, and approved by the State Government or any officer specified by it in this behalf, during the continuance of such approval;
(kkk) deductions made, with the written authorisation of the employed person, for payment of the fees payable by him for the membership of any trade union registered under the Trade Unions Act, 1926 (16 of 1926);
17[(I) deductions for payment of insurance premia on Fidelity Guarantee Bonds;
(m) deductions for recovery of losses sustained by a railway administration on account of acceptance by the employed person of counterfeit or base coins or mutilated or forged currency notes;
(n) deductions for recovery of losses sustained by a railway administration on account of the failure of the employed person to invoice, to bill, to collect or to account for the appropriate charges due to that administration, whether in respect of fares, freight, demurrage, wharfage and carnage or in respect of sale of food in catering establishments or in respect of sale of commodities in grain shops or otherwise;
(o) deductions for recovery of losses sustained by a railway administration on account of any rebates or refunds incorrectly granted by the employed person where such loss is directly attributable to his .neglect or default.]
18[( p) deductions, made with the written authorisation of the employed person, for contribution to the Prime Minister's National Relief Fund or to such other Fund as the Central Government may, by notification in the Official Gazette, specify.)
19[ (q) deductions for contributions to any insurance scheme framed by the Central Government for the benefit of its employees.)
20[ (3) Notwithstanding anything contained in this Act, the total amount of deductions which may be made under sub-section (2) in any wage-period from the wages of any employed person shall not exceed
(i) in cases where such deductions are wholly or partly made for payments to cooperative societies under clause (j) of sub-section (2), seventy-five per cent of such wages, and
(ii) in any other case, fifty per cent of such wages:
Provided that where the total deductions authorised under sub-section (2) exceed seventy-five per cent or, as the case may be, fifty per cent of the wages, the excess may be recovered in such manner as may be prescribed
(4) Nothing contained in this section shall be construed as precluding the employer from recovering from the wages of the employed person or otherwise any amount payable by such person under any law for the time being in force other than the Indian Railways Act, 1890 (9 of 1890)].
Footnotes:
1 Re-numbered by, Act No.68 of 1957, S.5 (w.e.f. 1.4.1958)
2 Ins. by Act No. . 68 of 1957 (w e.f. 1.4.1958)
3 Subs. by Act NO.68 of 1957, S.5 (w.e.f. 1.4.1958)
4 Omi by the A.O 1937.
5 These word was Subs. for the word "Provincial", by the A.O of' 1950
6 Ins. by Act No.53 of 1964, S.6(i)(a) (w.e.f. 1.2.1965)
7 Subs. by Act No.58 of' 1974
8 Subs, by Act No.53 of 1964, S.6(i)(b) (w.e.f. 1.2.1965)
9 These word was subs. for the word "Provincial", by the A.O. of 1950
10 Omi. by Ordinance 3 of 1940, S.2
11 These word was subs. for the word "Provincial", by the AO. of 1950
12 Iris, by Act No.53 of 1964, S.6(i)(a) (w.e.f. 1.2.1965)
13 Del. by Mali. 42 of 1961 S.2
14 Subs. by Act No.68 of 1957, S.5 (w.e.f 1.4.1958)
15 Del. by Mah. 13 of 1961, S.5
16 Ins. by Act 38 of 1982, S.7 (w.e.f. 15.10.1982)
17 Ins. by Act 53 of 1964, S.6 (w.e.f. 1.2.1965)
18 Ins. by Act No.29 of 1976. S.4 (w.e.f. 12.11.1975
19 Ins. by Act No.19 of 1977. S.2 (w.e.f. 30.6.1977)
20 Ins. by Act No.53 of 1964, S.6(ii) (w.e.f 1.2.1965)
STATE AMENDMENTS
BIHAR
The Payment of Wages (Bihar Amendment) Act, 1956 - (Bihar Act XXVIII of 1956).
Section 2: Amendment of Section 7 of Act IV of 1936, In clause (d) of sub-section (2) of Section 7 of the Payment of Wages Act, 1936 (IV of 1936), after the word, 'employer' the words "or by the State. Government or by a Statutory Housing Board or by such an Agency as the State Government may notify" shall be inserted.
GUJARAT
Amendment of Section 7 of Act IV of 1936 - In Section 7 of the Principal Act in sub-section (2), in clause (k), the words "for being deposited in any Post Office, Savings Bank" shall be deleted. (Vide Guj. Act XXVI of 1961.)
KARNATAKA
(1) In Section 7 of the Principal Act in sub-section (2), after cl. (p) the following clauses shall be added, namely,
"(q) deductions to recover from a person re-employed after the termination of his former employment any amount paid to him from a provident fund or as a gratuity on such termination:
Provided that such recovery shall not exceed 20 per cent of total earnings. Re-employment in this context means employment under the same employer;
(r) Omitted' by Karnataka Act 2 of 1982, S.2 (w.e.f. 28.1.1982) (Vide S.3 of Karnataka Act 2 of 1977.)
(2) The Amendment made by Born. Act 37 of 1956 in force in Belgaum area by Karnataka Act 2 of 1977, S.2 & Sch
KERALA
In Section 7 of the Payment of Wages Act, 1936 (Central Act IV of 1936) in sub-section (2), after clause (O), the following clause shall be inserted, namely:
"(p) deduction for repayment to the State Government of the amount of financial aid granted. under the Kerala Financial Aid (to the Discharged or Dismissed Labour Rules, 1958"), (Vide Ker. Act XXXIV-of 1959).
MADHYA PRADESH
In sub-section (2) of Section 7, after clause (e) insert:
"(ee)] deduction with the written authorisation of the person employed for payment of any subscription to any welfare scheme sponsored by the employees whether with or without participation of employer, such as Employees Death Relief Scheme and approved by such authority and in such manner as may be prescribed;"
[(Vide M.P. Act XXXIII of 1976)].
MAHARASHTRA
1. In sub-section (2) of Section 7 of the Principal Act in clause (d), after the word "employer" the following shall be added, namely:
"or the State Government, or the Bombay Housing Board constituted under the Bombay Housing Board Act, 1948, (Bom. LXIX of 1948), or such other agency as the State Government may, by notification in the Official Gazette, direct". (Vide Mah. Act 37 of 1956).
2. The Payment of Wages (Maharashtra Amendment) Act, 1961 (Mah. Act XLII of 1961). Section 2, Amendment of Section 7 of Act IV of 1936 - In sub-section (2)- ,
(a) in clause (j) the word 'and' at the end shall be deleted;
(b) After clause (k) the following new clause shall be added, namely;
"(I) deduction made, with the consent of the person employed, for contribution towards any public charitable purpose which the State Government may by notification in the Official Gazette specify in that behalf."
3. Payment of Wages (Maharashtra Provision for Uniform Application and Amendment) Act, 1960 (Mah. Act XIII of 1961).
Section 5: Amendment of Section 7 of the Act IV of 1936-In Section 7 of the principal Act, in sub-section (2), clause (k) the words for 'being deposited in any Post Office Saving Bank' shall be deleted.
ORISSA
In clause (d) of sub-Section - 2) of Section 7 of the Principal Act, after the words
"supplied by the employers" the words "or by the State Government or by any
Housing Board or Agency which the State Government may notify in this behalf shall be inserted. (Vide Orissa Act No.22 of 1956).
PONDICHERRY
In sub-section (2) of Section 7, after clause (d), the following clause shall be inserted, namely:
"(dd) deductions for electricity supplied to the employed person by the Electricity Department of the Government of Pondicherry;" -Pondicherry Act No.9 of 1970, Section 2.
TAMIL NADU
In sub-section (2) of Section 7, insert the following clause after clause (d), namely:
"(dd) deductions for electricity supplied to the employed person son by the Tamil Nadu Electricity Board under Section 5 of the Electricity (Supply) Act ' 1948 (Central Act 54 of 1948) (hereinafter in this Act referred to as the State Electricity Board."-T.N. Act XX of 1963 and T.N.A.L.O. 1970.
In sub-section (2) of Section 7, after clause (g), the following clause shall be inserted
"(gg) deductions of profession tax payable by the employed person to any local authority". (T.N. Act 47 of 1974).
WEST BENGAL
In sub-section (2) of Section 7, after clause (e), the following clause shall be inserted
''(ee) deductions for contribution to a fund created under a 'Death Benefit Scheme' approved by the State Government and designed to render pecuniary assistance to the nominees of a deceased employed person nominated in such manner as may be prescribed who had been a member of such a scheme:
Provided that no deduction shall be made without written authorisation of the employed person in the form and manner prescribed in the scheme:
Explanation I.- (1) Where the employed person has a family, a member of the family, shall be nominated.
(2) Where the employed person has no family, any person may be nominated.
Explanation II.-For the purpose of
Explanation 1, -
(1) The family of a male employed person shall include his wife, legitimate children, dependent parents, the widow and legitimate children of his predeceased son:
Provided that if such employed person proves that his wife has ceased, under the personal law governing him or the customary law of the community to which the spouses belong, to be entitled to maintenance from him, the wife shall not be regarded as a member of his family:
Provided further that such employed person may subsequently by a notice in writing to such authority as may be specified by the State Government by notification in this behalf declare that his wife may continue to be regarded as a member of his family;
(2) The family of a female employed person shall include her husband, legitimate children, dependent parents, husband's dependent parents, the widow and legitimate children of her pre-deceased son:
Provided that such employed person may by a notice in writing to such authority as may be specified by the State Government by notification in this behalf declare that her husband and his dependent parents have been excluded from her family:
Provided further that such employed person may subsequently by a notice in writing to such authority cancel the aforesaid notice; and
(3) If a legitimate child of an employed person or of a pre-deceased son of an employed person is validly adopted by any other person; under any law in force for the time being, such child shall not be a member of the family of such employed person. (W.B, Act 26 of 1975 as amended by W.B. Act 14 of 1981).
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