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Sec 200 of the Companies Act

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(Querist)
05 October 2007 Section 200 of the Companies Act prohibts tax free payment of salary. However, under the income tax, gross up clause is available. Please advise on the following situation:

An employee is to be paid net of tax salary; but the offer letter is to be made or worded in such a way that it complies with Section 200 of the Companies Act, 1956.

Pls advice.
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Ravikumar.G

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Ravikumar.G (Expert)
05 October 2007 Can u please explain me in which clause is available under the income tax act to gross up salary.

I also want to know abount this particular section 200 of co's act.
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CA. Dashrath Maheshwari

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CA. Dashrath Maheshwari (Expert)
06 October 2007 Both acts are saperate and this is a general practice
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KAAPIL

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KAAPIL (Expert)
12 November 2007 Thanks Mr. Dashrath Maheshwari for the clarification.

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