PROFESSIONA FEES TO DIRECTOR
This query is : Resolved
05 January 2010
WE CAN PAY AS PROFESSIONAL FEES TO DIRECTOR AND AGAINST THE SAME FEES CAN HE BOOK EXPENSES
IT IS ALLOWABLE UNDER COMPANIES ACT ALSO
IT IS ALLOWABLE UNDER COMPANIES ACT ALSO
05 January 2010
as per income tax:
there is no problem as such if payment made to director on account of professional service provided he is bonafidely providing professional services to company.
Otherwise the payment will be covered u/s 40 a 2b i.e. payment to specified persons and excessive payment can be disallowed by the AO.
Further a professional person can claim deduction of any expenditure incurred in relation with provision of service means expenses should be related with profession e.g.salary of assistant, telephoen, car, electricity exp. of office, dep. on assets used directly or indirectly for service etc.
However as per companies act any payment made to director will be treated as director's remuneration so you have to take care of provisions related to director's remuneration as per companies act.
there is no problem as such if payment made to director on account of professional service provided he is bonafidely providing professional services to company.
Otherwise the payment will be covered u/s 40 a 2b i.e. payment to specified persons and excessive payment can be disallowed by the AO.
Further a professional person can claim deduction of any expenditure incurred in relation with provision of service means expenses should be related with profession e.g.salary of assistant, telephoen, car, electricity exp. of office, dep. on assets used directly or indirectly for service etc.
However as per companies act any payment made to director will be treated as director's remuneration so you have to take care of provisions related to director's remuneration as per companies act.
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