TDS on Comm. paid to an independent director

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Anuj Gupta (Querist)
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11 June 2009 1.Can a company make payment to an independent director as commission.

2.If Yes then,Whether TDS on Commission paid to an independent director shd be deducted u/s 192 or 194H.

Ankur Garg

Ankur Garg (Expert)
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11 June 2009 Yes

A company can make payment to an independent director as commission.

If you go by the language of Section 309(4) you may pay commission to an independent director if company by passing special resolution in GM approve such payment.

Regards

Guest

Guest (Expert)

11 June 2009 Agreed with Mr. Garg and it will be come U/s 194H, limit is 2500 @ 10.30%

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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11 June 2009 But, then the director would no longer remain "Independent".

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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11 June 2009 such commission paid will not attract the TDS provision,

194H does not cover professional services, and in 192 there must be employer-employee relationship.

Anuj Gupta

Anuj Gupta (Querist)
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12 June 2009 still conflict b/w ankur & nitin...please give me d reply with relevant sections & rules....my own view is that - TDS section wud apply depending upon hw d director is showng it in his I.T. Return...as salary or Commission...

whethr an independent director can accept payment as commission..

Further section 309(4) wont apply as said by ankur..bcoz in companies act there is no concept of independent director..it defined only exe. or non-exe. director...sebi's listing guidelines & corporate governance define independent director...frnz i need a viable reply...

one more fact--director is receiving only comm. frm d company,nothng else.