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Change in Remmuneration to a Director

Raajasekar (Finance Manager) (37 Points)

14 July 2009

Can a Director (of Pvt. Ltd. Co.) be paid escalated remuneration?

say for example : Rs. 1.00 lakh in 2005-06, Rs.1.50 lakhs in 2006-07 and again Rs. 1.00 lakh in 2007-08

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5 Replies

sudhir gautam (CA Final) (145 Points)
Replied 14 July 2009

Dear Sir

You can pay the director remuneration at any rate in the private limited company.The Auditors of the company will show under the head payment to sepecified person in the notes

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(Guest)

Dear Raajasekar,

As per rules remuneration should be : -

REMUNERATION OF A DIRECTOR

1). Public Limited Company

2). Remuneration of MD / ED / WTD

i). Event of No Profit or Profit inadequate

ii). Law permits payment in excess of 5%, on a slab rate based on effective capital – Paid-up Capital + Reserves & Surplus + LT Loans (No WCL, OD etc) – (Investments + accumulated losses + preliminary exps not w/o.)

Less than Rs. 1 Crore (Effective Capital)	Rs. 75,000
More than 1 Less than Rs. 5 Crores	Rs. 1,00,000
More than 5 Less than Rs. 25 Crores	Rs. 1,25,000
More than 25 Less than Rs. 50 Crores	Rs.1,50,000
More than 50 Less than Rs. 100 Crores	Rs. 1,75,000
More than Rs. 100 Crores	Rs. 2,00,000

Gargi Ranade (CS) (619 Points)
Replied 14 July 2009

Hi Rajasekar Sir,

I totally agree with views of Sudhir Gautam sir, Scetion 269 does not apply to Private Limited Company which is not subsidiary of Public Company. Hence you can pay any amount of remunaration to Director