TDS APPLICABILITIY

This query is : Resolved

Suresh S. Tejwani (Querist)
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12 March 2026 In a Private Limited Company, the company pays a salary of ₹12,00,000 per year to one of its directors. What will be the TDS applicability on this salary for the Financial Year 2025–26 under the Income Tax Act, 1961? And whether any other limits or conditions are applicable for the company while paying salary to directors.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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13 March 2026 For a Private Limited Company paying a ₹12,00,000 salary to a director in FY 2025-26, TDS falls under Section 192 and is calculated using the director's applicable tax slabs. If the director relies purely on this salary under the New Tax Regime, no TDS needs to be deducted due to the standard deduction and Section 87A rebate. Private Limited Companies face no statutory cap on how much they can pay directors, provided the salary is approved by a board resolution and represents a reasonable business expense under the Income Tax Act.

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