personal exp of directors

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2010 Should we transfer personal expense of director to capital account or debit it to companies expenses

or should we first debit to companies exp and transf to their individual account routing through jv

please help me out

Ashish Limaye

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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24 December 2010 A. As such personal exps of directors are not allowed to b spent from comapanies' income, unless aoa provides for the same. B. If aoa permits such expense, then its added to director's remuneration....

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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24 December 2010 it will be added to Dir remineratin and will be dr to P&L of company to the extent remineration allowed...

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Vipin Kumar

Vipin Kumar (Expert)
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24 December 2010 Try making these entries

Director's "Personal A/c" Dr. XXXX
to Cash/ Bank XXXX

Then see if there any salary is to be given to him if there is so then adjust his account as without making him salary payment

make this entry:

Director's "Salary Payable A/c" Dr. XXXX
to Director's "Personal Expense A/c" XXXX

If there is no such salary payable then it shall be disallowed expense under Income Tax as personal expenses of director's can not be debited to company's profit and loss account.