Excess bank balance in company

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A business owner with a private limited company has a significant bank balance of Rs 9 lacs and wishes to use this money for personal use, having already paid director remuneration. They are exploring options to extract these funds from the company. One suggestion is to pay advance salary, but this raises questions about GST applicability and immediate income tax implications for the individual.

DIVYESH JAIN

DIVYESH JAIN (Querist)

19 February 2020 Dear Sir,

I am having a Private Limited company in which I am having a bank balance of Rs 9 lacs. I have already given Director remuneration to all directors.

How can I use this money for my personal use. What are the options available with me as I don't want to keep so much of bank balance in my company books.

Regards,
Divyesh Jain

Amol S Joglekar

Amol S Joglekar (Expert)

20 February 2020 You can pay advance salary if you wish

DIVYESH JAIN

DIVYESH JAIN (Querist)

20 February 2020 Can I show 9 lacs as Advance Salary this financial year itself ? i.e. F.Y. 2019-20. In my personal books of accounts the turnover is coming to Rs. 17 lacs and after getting this salary of 9 lacs, will GST not become applicable to me. I am not yet registered in GST in my individual capacity.

Amol S Joglekar

Amol S Joglekar (Expert)

20 February 2020 so much so, advance salary will be taxed this year itself under income tax also

DIVYESH JAIN

DIVYESH JAIN (Querist)

20 February 2020 Ok, Thank you Sir

Amol S Joglekar

Amol S Joglekar (Expert)

20 February 2020 you are most welcome.
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