Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Director salary limit

JITENDRA SINGHVI (SELF EMPLYOED) (211 Points)

29 August 2019

What is the limit on directors salary of private limited company (company is in loss)

Reply
Follow
Share

6 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 29 August 2019

No more specific limits...

Upgrade to CAclubindia Pro. Subscribe Now!

CS Vasudev Sharma (Service) (405 Points)
Replied 30 August 2019

Salary for Board of Directors in a private limited company can be defined through Board Resolution. It is not mandatory to pass the resolution but the same will help in case of assessment under Income Tax. It is advisable to pass a resolution in a Board Meeting starting at FY or at any time during the FY.

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 30 August 2019

Yeah... Good Advice Dear.

But, Query is limit of salary.

Is any limit for salary is CA or any other act...??

CS M Pota (Company Secreatary) (3186 Points)
Replied 30 August 2019

In case of a Private limited Company there is no limit for payment of remuneration to director or directors.The remuneration shall be decided by the Borad by passing of resolution at the duly convened Board meeting.

1 Like

Jatin Bajaj (CS) (2930 Points)
Replied 31 August 2019

As the provisions of section 197 is not applicable on the private limited Company, so there is no barred on the limit of remuneration of private limited Company. However if the Company is running into loss, the Board of Directors of private Company can pass the Board resolution in the Board meeting and fix the limit of remuneration for specific period of time subject to renewal after the specified expiry period.