Director's remuneration

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Darshil (Querist)

12 June 2009 I have pvt. ltd. co. I am taking remuneration from it. How much remuneration taken by me is allowable from income tax. Is there any limit for remuneration? Can it also applicable to sleeping director?

chetan soni

chetan soni (Expert)

12 June 2009 There is no limit for remuneration paid to director. But it should be reasonable so.

Also note you can pay the remuneration to sleeping partner, but it will not be allowed in income tax computation.

The logic to sec 40(b) will work at this situation. As per sec. 40(b) only working partner can drawn the remuneration. Remuneration paid to sleeping partner is not allowed under income tax.

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

13 June 2009 Even the remuneration to a non-executive director will not be qualified for deduction under the Companies Act. Moreover, the same can not be supported by a resolution of the Board or a General Meeting.

Ankur Garg

Ankur Garg (Expert)

13 June 2009 As far as provisions of companies act, 1956 are concerned in a pvt. Co. there is no limit on remuneration. In a pvt. Co. the same is governed by Article of Association of the company. But the payment is subject to section-314 of the companies act, 1956.