Is Managing director an employee?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2010 One of our clients appointed a managing director in Nov,09 and filed form 32 in nov.09 They carried out the employment agreement stating M.D is appointed in Jan, 2010.

They started paying salary in march. Now the question from the view of Income tax is 'will the M.D be liable to pay tax on salary from nov, 09 or march 2010.

taxindiaconnect

taxindiaconnect (Expert)
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09 April 2010 yes

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2010 Sir

Yes means?? Kindly clarify

Taranjit Singh

Taranjit Singh (Expert)
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09 April 2010 If the employer give Salary Certificate from the month of Nov.09 then MD has to pay tax from that month.

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2010 Sir

The company has started providing with the salary to M.D only from March. As per my opinion, it is as per the discretion of the contract between the company & M.D sine M.D is not been given any salary between nov.-march.

What i want 2 know is thatjust because the M.D got appointed in Nov, will he be liable to pay tax from Nov.??

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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09 April 2010 HENCE HE NOT WITHDRAW ANY SALARY ON NOV TO FEB. THEN NOT LIABLE TO TAX,

BUT IF PAYMENT IS MADE ONE TIME FOR THE PERIOD OF NOV TO MARCH OR PAYMENT OF MARCH ONLY IS EXCESS OF BASIC EXEMPTION LIMIT IE 160000/- THEN REQUIRE TO DEDUCT TDS.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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09 April 2010 AGREE

UDAY

UDAY (Expert)
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09 April 2010 even if u make provision for salary payable or Director's remuneartion payable if it crossed d prescribed limit then u need to deduct TDS on d same.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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09 April 2010 In the case of CIT Vs. Travancore Chemical manufacturing Company (1982) 133 ITR 818 the Kerala High Court ,in the context of the then section 16(1) of the IT Act 1961, ruled that managing Director is an employee of the Company. If the ruling is followed remuneration is salary and income tax is to be deducted under section 192 on payment basis and not on due basis.