Fees paid to director of nidhi company

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19 July 2012 Key Guardian Fees paid by Nidhi Company to the director. Will T D S Provisions attracted for payments

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 July 2012 Yes, TDS provisions apply. Section 194J.

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Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2012 THANK YOU VERY MUCH SIR,

IS T D S PROVISIONS APPLY, IF THE GUARDIAN FEES PAID TO THE DIRECTOR BEFORE 31.03.2012

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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24 July 2024 Yes, TDS (Tax Deducted at Source) provisions apply to payments made to directors including guardian fees if they meet the criteria specified under the Income Tax Act, 1961. Here are the key points to consider:

1. **Nature of Payment:** Payments made to directors, including fees paid to a guardian who is also a director, are subject to TDS provisions if they are considered under a contractual obligation or a statutory requirement.

2. **Applicability of TDS:** As per the Income Tax Act, TDS is applicable on various payments including:
- Salary payments to directors.
- Professional fees or consultancy fees paid to directors.
- Other payments such as commission, rent, interest, etc., if applicable.

3. **Threshold for TDS:** TDS is applicable if the payment to the director exceeds the threshold limits specified under the Income Tax Act. For professional fees and other payments, TDS provisions apply when the threshold is crossed. For salary payments, TDS is applicable irrespective of the threshold.

4. **Rates of TDS:** The rates of TDS applicable depend on the nature of the payment and the relevant provisions of the Income Tax Act. For example, professional fees may attract TDS at a specified rate, whereas salary payments to directors may have different TDS rates.

5. **Due Date for TDS Deduction and Payment:** TDS should typically be deducted at the time of payment or accrual, whichever is earlier, and should be deposited with the government within the stipulated time frame along with filing of TDS returns.

6. **Exemption and Deduction:** There are provisions for exemptions and deductions under the Income Tax Act, and certain payments may be exempt from TDS based on specific conditions and declarations provided by the recipient (director).

### Conclusion:
If the guardian fees paid to a director (who is also acting as a guardian) before 31st March 2012 meet the criteria specified under the Income Tax Act and exceed the applicable threshold, TDS provisions are applicable. It's essential to ensure compliance with TDS requirements, including deduction, deposit, and filing of returns, to avoid penalties and ensure proper tax compliance. For specific details and rates applicable at the time of payment, consulting with a tax advisor or chartered accountant is recommended.

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