susan (NA) (27 Points)
11 January 2011In the case of a public company, the company is paying housing rent(personal) of director.
The director does not want it to be shown as part of his remuneration to avoid tax.
Currently the company is accounting for rent paid by debiting the director’s account.
And crediting bank account. The director also deposits and withdraws money at regular intervals. What is the correct treatment for this?
Pankaj Arora
(Learner)
(3134 Points)
Replied 11 January 2011
I think you should not account of director personal expenses. you should pay rent from director’s personal bank account.
Karan Teli
(Life Is just an Illusion...!!)
(4573 Points)
Replied 22 January 2011
Basically it is a type of remuneration and it shall be accounted in his personal ledger and there is no chance of escaping this from tax due to HRA`s provision. the entries can be:
Director a/c......dr
To bank a/c
&
Rent a/c............ dr
To Bank a/c
CAclubindia
