Regarding TDS Applicability For Director Remuneration

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Director remuneration is taxed under Sec 192 only if an employer-employee relationship exists. Without PF/PT, it's treated as professional fees under Sec 194J with 10% TDS. Wrong deduction may lead to interest, penalty, and compliance issues.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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21 April 2026 IF REMUNERATION IS BEING PAID TO A DIRECTOR IN PRIVATE LTD AND NEITHER PF IS DEDUCTED NOR ANY PROFESSIONAL TAX IS PAID THEN UNDER WHICH SECTION TDS SHOULD BE DEDUCTED SEC 192 OR 194J?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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21 April 2026 Section 192 (Salary): Requires an employer-employee relationship (typically involves PF and PT).

Section 194J (Professional Fees): Applies to non-employee directors.

Decision: Since PF and PT are not being paid, the remuneration should be treated as professional fees. Deduct TDS under Section 194J at a flat rate of 10%.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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21 April 2026 WHAT ARE THE CONSEQUENCIES FOR DEDUCTING IT UNDER SEC 192

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