Tax On Remuneration

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This discussion clarifies the tax treatment of remuneration paid by a Pvt Ltd company to its directors. Generally, if treated as salary, it's taxable under the 'Salary' head with TDS deducted by the company. However, director sitting fees are considered professional fees and subject to TDS under Section 194J of the Income Tax Act. GST is typically not applicable if remuneration is paid to a director as an employee.

sankar ponnan

sankar ponnan (Querist)
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19 March 2021 SIR-

Pvt Ltd Company pays remunerations to its director.
Any Tax liability will be applicable on it to Company ?

Plz guide me sir\
thanks in adv

Spurto Consultancy Services

Spurto Consultancy Services (Expert)
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19 March 2021 If the remuneration is paid to director as an employee then there will not be any GST.

You can refer to CGST circular no. 140/2020 dated 10th June 2020 for reference.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 October 2021 As per Section 16 read with Section 192 of Income Tax Act, 1961, all directors remuneration are treated as Salary and will be taxable under the head “Salary” and Company is required to deduct TDS except the sitting fees.

Further, as per the provisions of Section 194J of the Income Tax Act, 1961, Sitting fees which are given by company to its directors will be treated as professional fees and company is required to deduct TDS @10%.

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