Taking out money from Pvt Ltd company

This query is : Resolved

DIVYESH JAIN (Querist)
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15 April 2021 Dear Sir,

I have a Pvt Ltd company which has a profit of roughly around 1 lac during the year. There is tds deduction of around Rs. 3 lacs which I want to take it out from the company.

How can I take this money out from the company. If I pay Salary to directors it will lead to loss of Rs. 2 lacs to the company. Is there any other way to take this money out from company.

Regards,
Divyesh Jain

CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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15 April 2021 Assuming that you are one of the shareholders of the company, TDS credits as such cannot be withdrawn, however these can be adjusted against income tax liability of the pvt ltd company. Profits can be withdrawn in the form of dividends subject to satisfaction of specified conditions.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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16 April 2021 I am the director in the comany. I can take director remuneration.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Hey Divyesh,

Here’s a quick rundown on how you can take money out from your Pvt Ltd company without unnecessarily increasing losses:

### 1. **Director’s Remuneration:**

* You can pay yourself a salary as a director.
* This will be an expense to the company, reducing profits (and tax), but you’ll get regular income.
* However, as you noted, paying a big salary when profits are low might cause a paper loss.

### 2. **Dividend:**

* Dividends can be paid out of **profits after tax**.
* Since your company made a profit (around 1 lac), you can declare a dividend.
* Dividends are paid to shareholders (including you if you hold shares).
* Dividends don’t reduce company profits but give you money out of company reserves.
* Remember, Dividend Distribution Tax (DDT) is abolished, but dividend income is taxable in your hands.

### 3. **Loan to Director:**

* If you have some personal funds invested as a loan to the company, you can take back that loan.
* Taking a fresh loan from the company to yourself as a director is complicated and subject to restrictions under the Companies Act and tax laws.

### 4. **Reimbursement/Expenses:**

* You can claim reimbursements for expenses incurred on behalf of the company.
* Not a big amount usually, but it’s a way to get some cash out without tax impact.

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### Regarding TDS:

* TDS is deducted on payments made by the company, and it’s a **tax credit** with the Income Tax Department.
* TDS deducted cannot be withdrawn as cash. It reduces your company’s tax liability.
* You can **adjust TDS credits while filing your company’s income tax return**, and either pay less tax or claim a refund.

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### Summary:

* To take money out: best options are **salary (remuneration)** or **dividend**.
* TDS is not cash, so it cannot be withdrawn.
* Director remuneration helps you get money but increases expenses.
* Dividend depends on availability of profits.

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If you want, I can help you calculate tax-efficient remuneration or dividend amount for your scenario. Want me to?

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