Sec 200 of the Companies Act

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Arvind (Querist)
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05 October 2007 Section 200 of the Companies Act prohibts tax free payment of salary. However, under the income tax, gross up clause is available. Please advise on the following situation:

An employee is to be paid net of tax salary; but the offer letter is to be made or worded in such a way that it complies with Section 200 of the Companies Act, 1956.

Pls advice.

Ravikumar.G

Ravikumar.G (Expert)
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05 October 2007 Can u please explain me in which clause is available under the income tax act to gross up salary.

I also want to know abount this particular section 200 of co's act.

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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06 October 2007 Both acts are saperate and this is a general practice

KAAPIL

KAAPIL (Expert)
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12 November 2007 Thanks Mr. Dashrath Maheshwari for the clarification.

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