Tds on directors remuneration of private limited company
This query is : Resolved
14 July 2013
Whether Tds is required to be deducted on Remuneration paid on Directors of Pvt. Ltd. Company.
14 July 2013
YES UNDER SEC 194J W.E.F1.7.2013, TDS NEEDS TO BE DEDUCTED.
14 July 2013
1)Please note
it all depends on director relationship with the company.
if there is employer employee relationship TDS under 192(salary)..otherwise TDS194J applicable vide newly inserted clause (1)(ba)
2)Please do refer 194J(1)(ba) inserted in budget 2012 and will be effective from 01.07.2012
3)TDS 192 is applicable on remuneration payable in case of Managing Director or wholetime director or executive director, if the director is in full time employment of the company.
4)Newly inserted clause 194J(1)(ba) clearly says that if remunerations paid is covered under 192 this section not applicable
So do ascertain the relationship of your director with the company and deduct TDS accordingly
Thanks & regards
Ganesh babu k
it all depends on director relationship with the company.
if there is employer employee relationship TDS under 192(salary)..otherwise TDS194J applicable vide newly inserted clause (1)(ba)
2)Please do refer 194J(1)(ba) inserted in budget 2012 and will be effective from 01.07.2012
3)TDS 192 is applicable on remuneration payable in case of Managing Director or wholetime director or executive director, if the director is in full time employment of the company.
4)Newly inserted clause 194J(1)(ba) clearly says that if remunerations paid is covered under 192 this section not applicable
So do ascertain the relationship of your director with the company and deduct TDS accordingly
Thanks & regards
Ganesh babu k
Message likes :
3 times
14 July 2013
Correctly answered by Ganeshbabu. If paid as salary TDS to be deducted u/s 192. Other than salary (like Sitting Fees) TDS to be deducted u/s 194J(1)(ba) @10%. No threshold limit for section 194J(1)(ba).
Message likes :
2 times
16 August 2016
Can any one tell me..what is the remedy , if the co has not made TDS Provision on Remuneration to Director u/s 192.
27 July 2025
It looks like you're dealing with the TDS provisions related to **director's remuneration** in a **Private Limited Company** and have a specific query about what to do if TDS was not deducted as required under **Section 192**.
Let’s break it down step-by-step to understand the situation and potential remedies:
### 1. **TDS on Director’s Remuneration (Section 192 vs. 194J)**
* **Section 192**: If the director is in a **full-time employment** relationship with the company (i.e., they are a **Managing Director**, **Whole-time Director**, or **Executive Director**), the remuneration is treated as **salary**, and TDS must be deducted under **Section 192**. This section follows the **income tax slab rates** for individuals.
* **Section 194J**: If the director is not in full-time employment, for example, if they are providing services as a **consultant** or part-time director, and the payments are not in the nature of salary, TDS will be deducted under **Section 194J** at **10%** for professional or technical services. This includes **sitting fees** or any other professional payments, but **there is no threshold limit** for Section 194J (i.e., TDS should be deducted regardless of the amount).
### 2. **When TDS is Not Deducted**
If the company has not deducted TDS on director's remuneration under Section 192 (for a full-time director) or Section 194J (for non-salaried payments), here’s what can be done:
### 3. **Remedies for Non-Deduction of TDS**
* **Pay TDS Along with Interest**:
* The company can **remit the TDS** along with **interest** to the government. The interest will be calculated based on how long the payment has been overdue.
* Interest for late deduction of TDS is **1% per month** from the due date of deduction until the date of actual deduction, and **1.5% per month** from the date of deduction until the date of deposit with the government (as per Section 201(1A)).
* **File Corrected TDS Return**:
* The company should file the **TDS return** (Form 24Q) for the respective quarter, showing the details of TDS that should have been deducted.
* If TDS was not deducted in the previous quarter, you need to correct the return by updating the records and submitting the corrected details.
* **Issue Form 16**:
* If TDS was not deducted earlier, the company will need to **issue Form 16** (if applicable) to the director, reflecting the TDS deductions (once they are paid).
* **Assess Penalties**:
* If TDS is not paid within the stipulated time, there may be **penalties** as per the provisions of the Income Tax Act. The penalty can be up to **Rs. 1,000** per day (Section 272A) for failure to file the TDS return on time.
* **Rectify Past Payments**:
* If payments were made in previous periods without deduction, the company needs to calculate the missed TDS amount and pay it along with the **interest on delayed deduction** and **delayed payment**.
### 4. **Summary of Key Steps**
1. **Identify the Nature of Remuneration**:
* If the director is a **full-time employee**, TDS should have been deducted under **Section 192**.
* If the director is a **part-time director or consultant**, TDS should have been deducted under **Section 194J** (for sitting fees or professional fees).
2. **Remit TDS and Pay Interest**:
* If the TDS was not deducted on time, calculate the overdue TDS and remit it to the government, along with interest.
3. **File Corrected TDS Return**:
* Ensure that the corrected TDS returns are filed for the respective period, reporting the correct amount of TDS deducted.
4. **Issue Form 16**:
* After remitting the TDS, issue the TDS certificate (Form 16) to the directors.
5. **Review Penalties**:
* Ensure that any penalties for late filing or non-deduction of TDS are addressed.
---
### Conclusion:
If TDS was not deducted under the correct section (192 or 194J) on the director's remuneration, the remedy is to pay the TDS amount along with the applicable interest for the delay and file the correct TDS return. Although there will be interest and possible penalties for late compliance, the company can still regularize the mistake by paying the overdue amounts and making the necessary filings.
Let me know if you need help with the exact calculations or any other details!
Let’s break it down step-by-step to understand the situation and potential remedies:
### 1. **TDS on Director’s Remuneration (Section 192 vs. 194J)**
* **Section 192**: If the director is in a **full-time employment** relationship with the company (i.e., they are a **Managing Director**, **Whole-time Director**, or **Executive Director**), the remuneration is treated as **salary**, and TDS must be deducted under **Section 192**. This section follows the **income tax slab rates** for individuals.
* **Section 194J**: If the director is not in full-time employment, for example, if they are providing services as a **consultant** or part-time director, and the payments are not in the nature of salary, TDS will be deducted under **Section 194J** at **10%** for professional or technical services. This includes **sitting fees** or any other professional payments, but **there is no threshold limit** for Section 194J (i.e., TDS should be deducted regardless of the amount).
### 2. **When TDS is Not Deducted**
If the company has not deducted TDS on director's remuneration under Section 192 (for a full-time director) or Section 194J (for non-salaried payments), here’s what can be done:
### 3. **Remedies for Non-Deduction of TDS**
* **Pay TDS Along with Interest**:
* The company can **remit the TDS** along with **interest** to the government. The interest will be calculated based on how long the payment has been overdue.
* Interest for late deduction of TDS is **1% per month** from the due date of deduction until the date of actual deduction, and **1.5% per month** from the date of deduction until the date of deposit with the government (as per Section 201(1A)).
* **File Corrected TDS Return**:
* The company should file the **TDS return** (Form 24Q) for the respective quarter, showing the details of TDS that should have been deducted.
* If TDS was not deducted in the previous quarter, you need to correct the return by updating the records and submitting the corrected details.
* **Issue Form 16**:
* If TDS was not deducted earlier, the company will need to **issue Form 16** (if applicable) to the director, reflecting the TDS deductions (once they are paid).
* **Assess Penalties**:
* If TDS is not paid within the stipulated time, there may be **penalties** as per the provisions of the Income Tax Act. The penalty can be up to **Rs. 1,000** per day (Section 272A) for failure to file the TDS return on time.
* **Rectify Past Payments**:
* If payments were made in previous periods without deduction, the company needs to calculate the missed TDS amount and pay it along with the **interest on delayed deduction** and **delayed payment**.
### 4. **Summary of Key Steps**
1. **Identify the Nature of Remuneration**:
* If the director is a **full-time employee**, TDS should have been deducted under **Section 192**.
* If the director is a **part-time director or consultant**, TDS should have been deducted under **Section 194J** (for sitting fees or professional fees).
2. **Remit TDS and Pay Interest**:
* If the TDS was not deducted on time, calculate the overdue TDS and remit it to the government, along with interest.
3. **File Corrected TDS Return**:
* Ensure that the corrected TDS returns are filed for the respective period, reporting the correct amount of TDS deducted.
4. **Issue Form 16**:
* After remitting the TDS, issue the TDS certificate (Form 16) to the directors.
5. **Review Penalties**:
* Ensure that any penalties for late filing or non-deduction of TDS are addressed.
---
### Conclusion:
If TDS was not deducted under the correct section (192 or 194J) on the director's remuneration, the remedy is to pay the TDS amount along with the applicable interest for the delay and file the correct TDS return. Although there will be interest and possible penalties for late compliance, the company can still regularize the mistake by paying the overdue amounts and making the necessary filings.
Let me know if you need help with the exact calculations or any other details!
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Notice from IT DEPTT IF FD AMOUNT EXCEEDS 10 LACS
- GST payable under RCM
- Applicablity on tds
- Unable to generate and save json file for updated return
- GSTR9- ITC
- Tax audit & Switching from Presumptive taxation
- Audit of F and O T/O
- Which SAC code should be selected??
- Section 194I not showing in TDS RPU for Compnay Assessee for TDS on rent
- LTCG offset against property buy
- Import purchase entry
- Rule 54(1A) for Distributing ITC
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
- CA Articleship Extension Matter
- GST OFFICER WRONG NOTICE
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Composition Dealer GST Annual Return Filing process
- Revision under Section 264 in The Income Tax Act, 1961
- TDS under section 195.
Trending Online Classes
-
LIVE Course on GSTR-9 & GSTR-9C (Technical | Practical | Concept - Based)
Sachin Jain03 November 2025
CAclubindia
