01 September 2010
limits are not specifically mentioned in co. act 1956,then there are possibility that one can give higher remuneration to the directors and there by reduce the profits and thereby avoid tax payments.
02 September 2010
YES IT IS ALSO A TOOL OF TAX PLANNING. HOWEVER, REMUNERATION PAID TO DIRECTORS IS TAXABLE IN THE INDIVIDUAL CAPACITY OF DIRECTORS. ALTHOUGH A REASONABLE AMOUNT SHOULD BE PAID TO DIRECTORS BY THE COMPANY AFTER AUTHORISING THE REMUNERATION IN BOARD MEETING. SECTION 40A(2)(b) SHALL BE APPLICABLE.