1. Commission is ascertained at the time of finalization of the B.Sheet; Will the same be the taxable income in the hands of the director for AY 08-09 or 09-10?
2. Under which head of income, such commission will be grouped?
The matter needs to be considered further in the light of the following:
Section 56(2) covers i) dividends ii) hire charges of machinery iii) income from letting of building, if inseparable iv)income referred to in sec 2(24)(xi); key man insurance v).... vi)certain gifts exceeding Rs 50000 in aggregate
Moreover, it is in the context of Companies Act that term Non Executive Director is treated separately. Otherwise, the same should be treated at par with Executive Director and commission paid be covered under the head of 'SALARY INCOME'
Non Executive directors also take part in the major decision making functions and involve themselves in the management of the affairs of any company. It is only on account of their being the Independent Directors that they are called as Non Executive Directors.
Let us discuss in view of the facts.
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