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Remuneration ( Managerial)

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MPR Sanjay Kumar

3145 Points Posted on 01 October 2022

dear charted Accountants,

the managerial remuneration does not exceed 11% of net profit that is okay

3% of net profit and 1% of net profit

in which scenaria I should have to use three percentage and one percentage could you please explain me the law

Replies (2)

Quick Summary

This discussion clarifies the rules around managerial remuneration, specifically the 11% net profit ceiling. It explains that 3% of net profit is applicable when a company lacks a Managing Director or Whole-Time Director. If such directors are present, the limit is 1%, with the overall cap remaining at 11% of profits calculated as per Section 198.

Chirag

Professional

1979 Points Posted on 02 October 2022

3% In Case when Company don't have any MD or Whole Time Director ,and In the case if it's is ,then 1% with the overall ceiling of 11% and profit to be calculated as per Sec 198