Remuneration to directors
This query is : Resolved
15 April 2010
In a Pvt Ltd company, Can a director who is a doctor be paid salary as well as consultancy fee. Also discuss the TDS implications thereon
Ankur Garg
(Expert)
15 April 2010
Strict provisions relating to managerial remuneration are not applicable to a private co. unless it is subsidiary of a public company.
Hence u r free to give any remuneration to your director subject to the provisions of your articles.
Regards
Hence u r free to give any remuneration to your director subject to the provisions of your articles.
Regards
CA. B.SRINIVASULU
(Expert)
15 April 2010
Yes it can be paid. But if consultancy fee is alied to his salary then it is also treated as salary for TDS purpose.
Ankur Garg
(Expert)
15 April 2010
Oops i forget to mention about section 314. This section is applicable to a private company.
If you pay your director any consultancy fee over and above the remuneration to which he is entitled as a director than in that case section 314(1)(a) would become applicable and you have to collect approval of shareholders by way of special resolution before paying any fee in addition to remuneration.
If you pay your director any consultancy fee over and above the remuneration to which he is entitled as a director than in that case section 314(1)(a) would become applicable and you have to collect approval of shareholders by way of special resolution before paying any fee in addition to remuneration.
16 April 2010
@ Ankurji,
Thankyou Ankurji, But any hindrance in paying the director a consultancy fee along with his remuneration, he being a qualified doctor?
@ Srinivasulu Sir,
Can't a stand be taken that such an amount is for his specialized service as a doctor and is not a remuneration but a Consultancy fee on patient basis, over and above his remuneration acting as a director
Thankyou Ankurji, But any hindrance in paying the director a consultancy fee along with his remuneration, he being a qualified doctor?
@ Srinivasulu Sir,
Can't a stand be taken that such an amount is for his specialized service as a doctor and is not a remuneration but a Consultancy fee on patient basis, over and above his remuneration acting as a director
kartik_somu
(Expert)
17 April 2010
amount paid as consultancy services are taxable as professional services taxable under sec 194 J
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