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?
arghya ghosh (none) (43 Points)
31 December 2012I 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?
Giridhar S Karandikar
(Team Lead)
(7543 Points)
Replied 31 December 2012
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
manoj
(student)
(5205 Points)
Replied 31 December 2012
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
Sarita
(Article)
(154 Points)
Replied 01 January 2013
"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.
CA Neil Ganatra
(Partner - Gautam Joshi & Co.)
(871 Points)
Replied 01 January 2013
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.
kavitha
(studying final)
(830 Points)
Replied 01 January 2013
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
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
CAclubindia
