Itr form

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 November 2011 Dear all,
A Person receies Director's remuneration from Private Limited Company. Which ITR Form he will have to fill up?

Please reply as far as possible.

Thanking You

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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22 November 2011 ITR-1, if he has only salary & interest income

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

25 November 2011 Sir thanks,
But I have little doubt that as we know there is no employer and employee relationship between company and director.Then why should we treat director's remuneration as salary?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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02 August 2024 When a person receives remuneration as a director from a private limited company, the correct Income Tax Return (ITR) form to be used and the classification of such remuneration can be understood as follows:

### ITR Form for Director's Remuneration

1. **ITR Form to Use:**
- **For Individual Directors:** If you are an individual director receiving remuneration from a private limited company, you should use **ITR-2**.
- **ITR-2** is suitable for individuals and Hindu Undivided Families (HUFs) who have income from salaries, house property, capital gains, or other sources.

2. **ITR Form Details:**
- **ITR-2** includes a section for “Income from Salary/Pension,” where you should report the director’s remuneration. It should be treated as income under the head “Salary” for tax purposes.

### Classification of Director’s Remuneration

Even though there is no traditional employer-employee relationship between a company and its directors, the remuneration paid to directors is classified as "salary" for tax purposes due to the following reasons:

1. **Nature of Payment:**
- **Director’s Remuneration:** According to the Income Tax Act, the remuneration paid to directors is considered as salary. This is because, under the law, directors are treated as employees of the company for the purpose of tax treatment, even though they do not have the same relationship as regular employees.

2. **Tax Deducted at Source (TDS):**
- The company will deduct TDS on the director's remuneration under Section 192 of the Income Tax Act, which is applicable to salaries. This deduction follows the same rules as for employees.

3. **Reporting Income:**
- In the Income Tax Return, director’s remuneration is reported in the “Salary” section, similar to how you would report salary income if you were a regular employee. This includes reporting gross remuneration, any deductions, and calculating taxable income accordingly.

### Summary

- **Form to Use:** ITR-2
- **Income Classification:** Director's remuneration should be classified as salary for tax purposes and reported under the "Income from Salary/Pension" section of the ITR-2.

By following these guidelines, you ensure that the director's remuneration is reported accurately and complies with the tax regulations. If you need any further clarification or assistance, it’s always a good idea to consult with a tax professional or chartered accountant.