LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Director salary clarification

lexbery (d) (227 Points)

19 September 2011

i need info regarding director salary...

there are three diretor in the company..none have been paid slary yet for the current year,i want to pay salary,question:-

1.how to pay salary for the months april to august?
2.in what ratio to pay salary?
3.can salary be paid in cash or cheque payment is mandatory?
4.what is the tax implication of payment of salary?
5.can only 1 director b paid the salary only?

Reply
Follow
Share

3 Replies

CS Bijoy (Expert) (6394 Points)
Replied 30 September 2011

You can pay salry either monthly remuneration or as fees for per meeting, in case of fees per meeting there is no limit you can pay any amount, but in case of Monthly salary you need to follow schedule XIII.

lexbery (d) (227 Points)
Replied 30 September 2011

Originally posted by : CS Bijoy
	You can pay salry either monthly remuneration or as fees for per meeting, in case of fees per meeting there is no limit you can pay any amount, but in case of Monthly salary you need to follow schedule XIII.

sir i dont knw wat does schedule x11 says??can u plz clarify?

ars (CS) (445 Points)
Replied 30 September 2011

1.how to pay salary for the months april to august?-

u need to follow the requisite/applicable proivisions of the C.A'56 eg. sec 198,309,269, sch XIII, C.Gov approval

U may pass a res. in the remuneration and board mg. to pay salary from 1/4/11 and pay salary upto sept'11 as dues in oct'11.

Remeber, if the dir. is/are executive ie. MD/WTD/CEO then a resolution to be passed in GM for appt. as well for remuneraion - 269, 310/311

2.in what ratio to pay salary? -

It is a co. and not a p/s firm, hence no ratin to be calculated. for amt.of salary it is purely the managment diescretion, based on profitability of the co.

If they r shareholders then rewarding by dividend could be a good idea. chk on that.

3.can salary be paid in cash or cheque payment is mandatory? - chq.

4.what is the tax implication of payment of salary? -

individual dir. will be taxed. for sal. amt. with perquisites, if any.

Co. need to cut TDS on monthly basis and to issue f/16 on annual basis.

5.can only 1 director b paid the salary only?

- it is purely the managment diescretion, based on profitability of the co.