Director salary limit

Salary for Board of Directors in a private limited company can be defined through Board Resolution. It is not mandatory to pass the resolution but the same will help in case of assessment under Income Tax. It is advisable to pass a resolution in a Board Meeting starting at FY or at any time during the FY.

In case of a Private limited Company there is no limit for payment of remuneration to  director or directors.The remuneration shall be decided by the Borad by passing of resolution at the duly convened Board meeting.

As the provisions of section 197 is not applicable on the private limited Company, so there is no barred on the limit of remuneration of private limited Company. However if the Company is running into loss, the Board of Directors of private Company can pass the Board resolution in the Board meeting and fix the limit of remuneration for specific period of time subject to renewal after the specified expiry period.

As per company act 197, one full time director or MD, remuneration is 3%, maximum was 10%.

more then one full time director or MD the limit is 11%. 

other then full time director limit is 1%.