09 January 2008
DIRECTORS DO NOT- REPEAT - DO NOT ENJOY ANY SPECIAL EXEMPTIONS IN INCOME TAX OR ANY ACT FOR THAT MATTER. THEY MAY BE EVEN AT A DISADVANTAGEOUS POSITION AS CAN BE SEEN BELOW. UNDER INCOME TAX ACT IN SECTION 40A(2) IF EXP.IS CONSIDERED AS EXCESSIVE FOR GOODS OR SERVICES ETC...AND WHEN SUCH PAYMENTS ARE MADE TO DIRECTORS WILL BE DISALLOWED. R.V.RAO
11 January 2008
Dear Sirs, To be more clear on this ,you have mentioned that Directors remuneration are taxed under Head salaries, that means they get exemptions under Medical reimbursement, LTA and HRA,as we give exemptions to employees to the above mentioned Allowances in our company.
would like to know whether they have even PF introduced applicability.
16 January 2008
Yes. The Medical reimbursement, LTA HRA PF etc to directors as package of salary will also be subject to the same provisions of Income tax Act as any other salary recipient.
CAclubindia
