Salary & professional fees
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 April 2012
Can a full time employee (Designation: General Manager/Managing Director) can draw salary and also professional fees from the company (pvt. ltd.)?
Offer letter of the company mentions only salary.
Bifurcation into prof. fees is for tax saving (TDS@10%). Is this permissible?
Offer letter of the company mentions only salary.
Bifurcation into prof. fees is for tax saving (TDS@10%). Is this permissible?
CA PARAS BAFNA
(Expert)
29 April 2012
Please wait for the passing the finance bill. As per recent amendments to Section 194J, you may deduct 10% TDS on such income being paid to directors.
.
However, such planning is not advisable in your case, as the employer has to consider other income of the employee also while deducting TDS U/s 192. The employer being the same person can not deny the fact of lesser TDS being deducted.
.
Further, a director is being paid for his overall services. How it can be said that he is being paid salary for only non-professional work, whereas he is being employed on the very basis of his being professional.
.
Any amount received from the employer is generally treated as salary and this principle can not be compromised for the
sake of lower TDS Deduction which ultimately is not going to reduce the tax liability of the Director.
employment in the company wh
.
However, such planning is not advisable in your case, as the employer has to consider other income of the employee also while deducting TDS U/s 192. The employer being the same person can not deny the fact of lesser TDS being deducted.
.
Further, a director is being paid for his overall services. How it can be said that he is being paid salary for only non-professional work, whereas he is being employed on the very basis of his being professional.
.
Any amount received from the employer is generally treated as salary and this principle can not be compromised for the
sake of lower TDS Deduction which ultimately is not going to reduce the tax liability of the Director.
employment in the company wh
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