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Payment to directors relatives

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Querist : Anonymous

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Querist : Anonymous (Querist)
26 April 2013 If a company pays rent to the relative of the director of company say to the wife of director, is there any problem in Income Tax being the relative of director?
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CA.Sourabh Sethia

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CA.Sourabh Sethia (Expert)
26 April 2013 Not a problem at all

but subject to following

1. Amount should be reasonable i.e it should not be excessive

2. should be genuine

3. actually paid or payable
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CA Nayan Ratandhayara

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CA Nayan Ratandhayara (Expert)
26 April 2013
->Transaction should be at the rate prevailing in the market.
-> TDS & Service Tax should be appropriately taken in to consideration.
-> It should not be only book entry. Pay it regularly as per rental agreement.
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