I want to ask that in which head of income director's commission for standing as a guarantor to bankers shall be taxed if such director is an employee of that company?
I want to ask that in which head of income director's commission for standing as a guarantor to bankers shall be taxed if such director is an employee of that company?
It shall be taxed as icome from salary, becasue whatever amounts are received by an employee from the company are required to shown as income from salary. As stated the director is an employee of the co so commission paid to director shud be shown as saalry income.
However the provision realting to ceiling on overall remuneration as stated in section 198 will be N/A in such case, because the director is incurring liability in his perosnal capacity and bearing the risk by standing as an gurantor on behalf oft he co against eh bank
if it is execitive direcor den it will be salay income if it is non executive director den it will be income from other source
"It shall be taxed as icome from salary, becasue whatever amounts are received by an employee from the company are required to shown as income from salary. As stated the director is an employee of the co so commission paid to director shud be shown as saalry income. However the provision realting to ceiling on overall remuneration as stated in section 198 will be N/A in such case, because the director is incurring liability in his perosnal capacity and bearing the risk by standing as an gurantor on behalf oft he co against eh bank"
I agree with Giridhar.
If such commission is part of the terms of employment of the director then it will be part of the salary. However if it's not in the terms of employment of the director then it will not form part of salary.
if there is an employer -employee relationship b/w company & Director then commision shall be charged under the Head Salaries.
if there is no such ER-EE relationship then charge the income under business income or other income
thaks guys
CAclubindia
