Drawings made by directors

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 March 2012 a director of private limited company uses the money of the company for his personal expenses and shows it as the expenditure incurred by the company under different expenditure head. can the amount used for his personal expenses can be shown as drawings made by the directors as in the case of proprietorship concern. otherwise what would be the alternative to shown such amount used in the company account books

Krishna Mohan

Krishna Mohan (Expert)
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07 March 2012 The drawings by the director for his personal expenditure shall be treated as deemed dividend. To avoid this, you can show the drawings as directors remuneration. TDS provisions need to be observed if you consider the drawings as his remuneration.

Querist : Anonymous

Querist : Anonymous (Querist)

07 March 2012 already the remuneration for directors is been paid at Rs 325000 per month. and TDS is been made on this amount. Is a director is required to take remuneration as specified in MOA and AOA of the company or there is not limit for his drawings in case of private limited company, co clarify in detail

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Krishna Mohan

Krishna Mohan (Expert)
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07 March 2012 There is no limit on director remuneration for a Pvt.ltd.company. Drawings has to be treated as remuneration. If not treated as remuneration, such expenses shall be disallowed during IT assessment and shall be treated as deemed dividend.