Can office rent be paid to a director of a pvt. ltd. co.?

I Think just an agreement between the director & company is enough but TDS liabilities arise if Rent paid is more than 120000 in a year For F.Y. 2009-10 and 180000 for F.Y.2010-11. and it also covered under service tax.

Originally posted by : RITU BAJAJ
	Plz advice me whether office rent can be paid to a director of a pvt. ltd. company? If yes, which section gets attracted? Does any approval from shareholders is required or just an agreement between the director and company will do? Plz answer my query. Its urgent.

Simply prepare a rent agreement and get it approved from BOD through a board resolution. Take care of section 299 and 301. Entry in 301 register is necessary.

Regards

Extra care is needs to be taken for this kind of transaction in a public company due to section 295-Loan to director. A real rent agreement supported by BM resolution is necessary to be maintained in records of the company to deal with the situation where question raised by ROC u/s 295 during investigation of the company affairs.

If the rent agreement is not prepared and lessor - lesse relationship is not created then Deedmed Dividend concept will also attract for the Director

Rgds

CS Jithesh

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Dear Ritu Ji,

There is no problem, just prepare a rent agreement, make entry in the register u/s 301 and pay rent to the directror. And ofcourse the Rent is subject to TDS as described by Mr. Harish.

Whether office rent can be paid to a director's HUF in a  pvt ltd. company by passing a Board Resolution and Agreement between Company and Director's HUF.

and how Income Tax attracts its.

Plz guide

IF rent paid to director and its relative, than what would be the answer as per companies act, 2013 and how many compliances will include in this transaction as per income tax act also ?