Commission to director

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derastsw (Querist)
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09 February 2012 A company takes CC limit from a bank for business purpose by providing its director's personal land as mortgage. Now the director wants commission or rent for his property being used by the company. If the company pays to its director in the form of commission / rent, please explain is it an allowable expenditure as per Income Tax Act 1961. If yes, what is suggested - Rent or Commission? Is TDS applicable?

kartik_somu

kartik_somu (Expert)
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09 February 2012 it cannot be rent.

it is commission and TDS will be applicable.

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CA. Hari Kishan

CA. Hari Kishan (Expert)
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09 February 2012 The amount paid to the director by the company for using the land (company literally using such premises for business purposes), then rent can be paid and TDS to deduct u/s 194I.

Should it be just for the sake of security for obtain C C facility then.. commission can be paid and TDS be deducted u/s 194H.

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