Tds on director

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Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2016 A director of a pvt. ltd. compay having salary remuneration of rs. 4 Lakh which is paid at the end of the year. Director also disclosed a rs. 1.70 Lacs deduction under section 80C out of which 1.50 lakh is deducted from the salary i.e. 4-1.5 =2.5 lakh. Now the Company not deducted on salary of director. whether it is Correct? kindly reply urgently.

Shishir Nayak

Shishir Nayak (Expert)
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04 July 2016 Any payment made in nature of salary TDS is deducted under Sec 192 of IT act and payments like sitting fee , professional fees to director TDS should be deducted u/s 194J. In your case you have to decide in what nature you have paid to director and deduct TDS .

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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04 July 2016 if you paid Director Remuneration above case TDS is not Applicable, if you pay other than director Remuneration TDS is Applicable u/s194J 10% if it excceds 30000/-P.A

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2016 Thanks for your valuable opinion
But i also want to know whether company having any liability if director having other income of rs. 2 lacs. which is not disclosed to the company. And company required any special disclosure in specified format from the director or any else.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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27 July 2025 Here’s a clear breakdown about TDS on directors and related compliance:

### 1. **TDS on Director’s Remuneration (Salary):**

* If payment to director is in the nature of **salary/remuneration**, TDS must be deducted under **Section 192**.
* The company should consider the director’s declared **80C deductions** and calculate TDS on net taxable salary.
* TDS must be deducted **at the time of payment or credit**, whichever is earlier.
* Not deducting TDS on salary payments is **not correct**; the company has a liability to deduct and deposit TDS.

### 2. **TDS on Other Payments to Directors (Sitting Fees, Professional Fees, Commission):**

* Payments like **sitting fees, professional fees, commission** (other than salary) are subject to TDS under **Section 194J**.
* TDS rate is usually **10%** (or as per applicable rate).
* Threshold limit is Rs. 30,000 per annum for deduction.

### 3. **Company’s Liability if Director Has Other Income Not Disclosed:**

* Company’s TDS liability is only on the **payments made by the company** to the director.
* Director’s other income is the director’s personal tax matter; company is not responsible for TDS on income not paid by company.
* However, company can require directors to furnish **Form 12BB** (declaration of investments, deductions, etc.) annually to help calculate TDS correctly.

### 4. **Disclosure/Documentation:**

* It is good practice to obtain **declaration in Form 12BB** from directors regarding investments/deductions.
* This helps company deduct correct TDS under section 192.
* No special disclosure format is mandated by law for other income of director outside company.

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**Summary:**

* TDS on director salary: mandatory under section 192.
* TDS on other payments (like sitting fees): under 194J.
* Company not liable for director’s other income outside company payments.
* Obtain Form 12BB from director to correctly compute TDS.

If you want, I can help draft a reminder letter/form for the director’s declaration. Would you like that?

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