Director's Remuneration

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CA. Jyoti Baid (Querist)
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26 March 2009 My question is whether director' remuneration for the month of March,2009 can be paid on 27/03/2009 i.e. before the end of the month.

If yes, then should the same will be accounted as Advances or not?

Regards,
Jyoti

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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26 March 2009 You cannot account before itself. The reason is as per income tax if you give advance to director it will become deemed dividned to extent of 3days or 4days salary.

Therefore at the maximum you can account on 31-3-2009 and they should deposit on 1-4-2009 only.

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CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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26 March 2009 Depends upon the contract between the company and director.
If it is specifically mentioned that salary becomes due or is payable on such date; then it is not possible.
Otherwise it is payable.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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27 March 2009 I hope Nitin sir we should see both income tax and companies act and then should decide. If we go purely by law of contract or general employment method we will be caught in income tax. In this case for argument we can say that 2009-10 salary will be paid in advace on 1-4-2009 which is rs.25 Lakhs. Whether the IT department or roc will keep quiet.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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28 March 2009 I agree with you in the above situation.
But sir, advance salary is different from advance.

CA. Jyoti Baid

CA. Jyoti Baid (Querist)
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03 April 2009 So is advance salary different from loans and advances. Please clarify

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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15 April 2009 Yes.

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