TDS ON DIRECTOR'S REMUNERATION

This query is : Resolved

CA Sanat Pyne (Querist)
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16 July 2009 MR.A IS DIRECTOR OF ABC CO. & XYZ CO. HE GETS REMUNERATION FROM BOTH COMPANY.
SHOULD TDS BE DEDUCTED ON BOTH THE COMPANY , OR FROM ANY ONE COMPANY?

pLEASE ANSWAR.

Abhishek Mohta

Abhishek Mohta (Expert)
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16 July 2009 If Mr. A's total income exceeds the minimum limit then TDS is to be deducted. Now, Mr. A can make arrangements with either of the one company. He should declare the remunerations from other company. Thus that company will deduct TDS on his entire income as per the laws.

Otherwise if he does not want to declare the income of one company to other the follwoing cases can occur:

a. If from both the company he is getting remuneration which is higher than the exemption limit then both the company will deduct TDS separately.

b. If either one company is paying him remuneration less than the exemption limit then the other company will only deduct tax.

c. If both the company is paying him remuneration less than his exemption limit than neither of them will deduct tax.

But in all these cases he has to make sure that he pays sufficient advance tax in order to avoid paying interest and penalty on the shortfall.

In my opinion he should go with the first option and declare the details to either one of the company stating to the other company that sufficient TDS has been deducted on his remuneration.