Salary & Professional Fees

This query is : Resolved

Rashi (Querist)
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20 August 2008 A pvt Ltd. company has given a salary of Rs. 2,40,000/- p.a to its employee Mr.A. Further, he has given Professional fees of Rs. 2,50,000/- due to his technical assistance.

Can the company give an employee (employed for the whole year) salary as well as professional fees

CA E.A.Ravikumar

CA E.A.Ravikumar (Expert)
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20 August 2008 If the employee is a professional or possesses proven skills, the answer is Yes.

The employee may have to take care of the service tax compliance, to the extent applicable.

It has to be ensured & established that this is not an arrangement purely to evade tax

following news item will be relevant

http://www.thehindubusinessline.com/2007/08/09/stories/2007080952770100.htm