Controversy about salary given to Director
This query is : Resolved
25 November 2010
Whether director of company can be called as employee of company? Whether Salary given to director by company is chargeable under the head salary or income from other sources?
25 November 2010
Yes. Director is employee of the company and Director remuneration is coming under Salary head of income
25 November 2010
Yes. Directors of company are the employee's of the company. The company itself has a separate legal entity.
Salary received by Directors from company is Taxable under the head income from salary.
Also TDS is deducted by the company on Director's remuneration u/s 192.
Salary received by Directors from company is Taxable under the head income from salary.
Also TDS is deducted by the company on Director's remuneration u/s 192.
26 November 2010
Director may or may not be an employee
Director if employed in the company would be called as an executive director. If he drawing a fixed remuneration, then it would be his salary. If he is employed in the company but is not drawing any salary and receiving only sitting fees, then it would be his other income.
Director may not be employed in the company. i.e. he may be an non-executive director. He may be drawing either sitting fees or commission or monthly remuneration in accordance with the provisions of the Companies Act. Such remuneration should be shown by the director either as Other Income or Business Income, if he is a professional/independent director.
TDS as stated by the other expert is to be deducted.
Director if employed in the company would be called as an executive director. If he drawing a fixed remuneration, then it would be his salary. If he is employed in the company but is not drawing any salary and receiving only sitting fees, then it would be his other income.
Director may not be employed in the company. i.e. he may be an non-executive director. He may be drawing either sitting fees or commission or monthly remuneration in accordance with the provisions of the Companies Act. Such remuneration should be shown by the director either as Other Income or Business Income, if he is a professional/independent director.
TDS as stated by the other expert is to be deducted.
26 November 2010
agree with expert.
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