TDS on Commission to Director

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This query is : Resolved

niki (Querist)

12 November 2008 Under which section should tax be dedcuted at source on commission payable to Director of a company?

In case, tax has not been dedcuted at source on the commission payable to Director, is such amount liable for disallowance u/s 40(a)(ia) of the I. T. Act?

Thanks & Regards

Ajith Kumar

Ajith Kumar (Expert)

12 November 2008 u need to deduct tax under section 1952 treating such commission as salary.

It is not liable to be diallowed u/s 40(a)(ia) of the IT Act.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

12 November 2008 If he is a wholetime director, 192.
If he is not it can not be treated as salary in my opnion and therefore 194J
Failure of TDS u/s 192 will not invoke 40(a)(ia), whereas the other section would.

Ravikumar.G

Ravikumar.G (Expert)

17 November 2008 The meaning of the term ‘salary’ for purposes of income tax is much wider than what is
normally understood. Every payment made by an employer to his employee for service
rendered would be chargeable to tax as income from salaries. The term ‘salary’ for the
purposes of Income-tax Act will include both monetary payments (e.g. basic salary, bonus,
commission, allowances etc.) as well as non-monetary facilities (e.g. housing accommodation,
medical facility, interest free loans etc).

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