directors salary in pvt ltd

dears friends

please let me know is it a compulsary for directors  to show  his salary from a pvt ltd company by company law .This company in which almost 100%  shares owned by both directors  and company engaged in agricultural activity (tree plantation) and there is no income from company might be for 10-12 years.

And does the income from agriculture of pvt ltd company is also exempt from income tax ,as the company only activity is agriculture and both directors are farmers 

Replies (3)

Raj...


Ur query is not so clear... may be u'll get ur answer from my reply...


1. There is no provision in Companies Act which will deal with the Tax Implication of Companies or Directors or else.. Income Tax is governed by Income Tax Act,1961.. So it is compulsory under I Tax Act to show the income from companies in any form..


2. Remuneration/Salary to Directors by Company is not compulsory under Companies Act. It depends on members n AOA's provision.


3. Agricultural Companies Income is fully exempt u/s 10(1) of Income Tax Act.. So no tax liabilty on Company if income is from only agricuture activities.


4. Salary to Directors / Dividend to members are taxable in the hands of receiver. So tax liablity will arise.


If u have any doubt, then do ask me again..


Adarsh

Raj...


Ur query is not so clear... may be u'll get ur answer from my reply...


1. There is no provision in Companies Act which will deal with the Tax Implication of Companies or Directors or else.. Income Tax is governed by Income Tax Act,1961.. So it is compulsory under I Tax Act to show the income from companies in any form..


2. Remuneration/Salary to Directors by Company is not compulsory under Companies Act. It depends on members n AOA's provision.


3. Agricultural Companies Income is fully exempt u/s 10(1) of Income Tax Act.. So no tax liabilty on Company if income is from only agricuture activities.


4. Salary to Directors / Dividend to members are taxable in the hands of receiver. So tax liablity will arise.


If u have any doubt, then do ask me again..


Adarsh....

thanks Adarsh,you explain very well thanks again

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