Directors remuneration

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2017 Dear Experts
As per 40 (A) 3 payment cannot exceed Rs 10,000 in a single day. So can a director remuneration be paid at Rs 10,000 on various dates for the year amounting to Rs 3 lakhs for the year.

Please reply

c.bakshi

c.bakshi (Expert)
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10 August 2017 Disallowance of 100% of expenditure if payment is made by any mode other than account-payee cheque or draft [Sec. 40 A(3)(a)]
Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account-payee cheque drawn on a bank or account-payee bank draft, exceeds Rs. 20,000 (Rs. 35,000 where payment is made for plying, leasing or hiring goods carriages), no deduction shall be allowed in respect of such expenditure.
Where payment is made for plying, hiring or leasing goods carriages, the payment shall have to be made by account-payee cheque or account-payee draft if the amount of payment exceeds Rs. 35,000 instead of Rs. 20,000 applicable in all other cases.

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