amount paid to Director

618 views 4 replies

Dear All;

If a Director draws a fixed amount from a private limited company, will this amount be subjected to applicability of TDS.

If an agreement / appointment letter, confirming the employer-employee relationship is issued to Director, will we be able to show this amount as salary from the company?

Director insists that company should pay a fixed amount to him regularly on a monthly basis.

Kindly advice if any otherway possible.

Thanks in advance.

Replies (4)

If an appointment letter confirming the employment of the director with the company, the director will be eligible for the monthly salary and the company is liable to deduct TDS on the salary. But, the director may or may not be holding shares in the private company. It all comes down to the appointment letter stating the terms and conditions of the employment of the director.

Yes, the Director is holding shares in the company.

Moreover, if there is no appointment / agreement letter confirminng the employer-employee relationship, isn't there any other way to show this amount.

If fixed salary is paid, that will be subject to deduction of TDS u/s 92B, taking into consideration the annual taxable income.

If fixed consultancy fees are paid, that will be subject to deduction of TDS u/s 194J.

Even commission paid will be taxed u/s 194H.

mihir is correct 

But Take care the director should not draw any excess loan and the same should not attract provsions of secion 2(22) (e) deemd dividend  

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 29 June 2026
Article Assistant

Alvino Consultancy LLP

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
29 June 2026
Accountant (Finance & Compliance)

TRIEYEZ

Kolkata

CA

View Details
Company
24 June 2026
Senior Account (VA Client Operations)

Karbon Business

Bengaluru

CA Inter

View Details
Company
ARTICLESHIP 27 June 2026
CA Articled Trainee And Paid Assistant

SKAA & Associates

New Delhi

CA Inter

View Details
Company
25 June 2026
Accounts & Taxation Executive

Dindukurthy & Associates

Hyderabad

MBA

View Details
Company
Featured 24 June 2026
HEAD - AUDIT AND TAXATION

A R JADHAV AND ASSOCIATES

Mumbai

CA Inter

View Details
Company
22 June 2026
Finance Manager- Chartered Accountant

Triveni Turbine Limited

Bengaluru

CA

View Details