Valerian Dsouza (Manager Audit & Taxation) (413 Points)
22 November 2012A Private Ltd. Co. paying monthly salary to its 3 working Directors and have been deducting TDS u/s. 192 as per slab rates and paying TDS/filing TDS returns !
Now I have referred to a article in the CA Club wherein I understood that on Directors remuneration falls under TDS u/s. 194 J. (TDS10%). Is it true ?
If yes then, since when this change is applicable? Are the Directors liable for Tax audit for earning Salary/Directors remuneration ? Kindly advice please !
Valerian Dsouza
CA Mukesh Goyal
(Assistant Manager)
(143 Points)
Replied 22 November 2012
Sec. 194J (ba) provides that 'any remuneration or fees or commission by whatever name called, other than those on which tax is deductible under sec. 192, to a director of a company' shall liable to deduct @ 10% tds.
Sec. 194J (ba) only apply where tds is not deducted under sec. 192 i.e. in case of remuneration to non executive director.
@VaibhavJ
(Believe!! Live your dreams!)
(33516 Points)
Replied 22 November 2012
Please refer Memorandum of Direct Taxes of Finance Bill, in which it has been clearly stated:
"Under the existing provisions of the Income-tax Act, a company, being an employer, is required to deduct tax at the time of payment of salary to its employees including Managing director/whole time director.
However, there is no specific provision for deduction of tax on the remuneration paid to a director which is not in the nature of salary. I
t is proposed to amend section 194J to provide that tax is required to be deducted on the remuneration paid to a director, which is not in the nature of salary, at the rate of 10% of such remuneration.
This amendment will take effect from 1st July, 2012." Director Remuneration is not covered under Sec 194J
Thanks//Vaibhav
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 22 November 2012
Salary to WTD/MD/ED will attract 192.
Remuneration to Part time directors -- section 194J.
No doubt about that.
@VaibhavJ
(Believe!! Live your dreams!)
(33516 Points)
Replied 23 November 2012
| Originally posted by : Dipjyoti Majumdar | ||
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Salary to WTD/MD/ED will attract 192. Remuneration to Part time directors -- section 194J. No doubt about that. |
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Agreed
Gourav Agrawal
(Internal & Statutory Auditor)
(32 Points)
Replied 23 October 2013
| Originally posted by : @ VaibhavJ | ||
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Originally posted by : Dipjyoti Majumdar Salary to WTD/MD/ED will attract 192. Remuneration to Part time directors -- section 194J. No doubt about that. Agreed |
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CA. Dinesh Jain
(Partner)
(25 Points)
Replied 28 June 2014
| Originally posted by : Valerian Dsouza | ||
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Please tell me about the any requirement of submission of form to ROC for appointment of Whole time director or Executive director for availing the benefit of TDS deduction U/s 192 instead of U/s 194 J. |
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