Payment to directors relatives

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2013 If a company pays rent to the relative of the director of company say to the wife of director, is there any problem in Income Tax being the relative of director?

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
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26 April 2013 Not a problem at all

but subject to following

1. Amount should be reasonable i.e it should not be excessive

2. should be genuine

3. actually paid or payable

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CA Nayan Ratandhayara

CA Nayan Ratandhayara (Expert)
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26 April 2013
->Transaction should be at the rate prevailing in the market.
-> TDS & Service Tax should be appropriately taken in to consideration.
-> It should not be only book entry. Pay it regularly as per rental agreement.

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