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Director Sitting Fees - "Business Income" or "Income from other sources"

Others 2807 views 4 replies

Dear experts, please guide on this query.

Siting fees paid to director TDS was deducted u/s 194J, amount is just Rs.40000.

Is it a 'business-income' or 'Income from other sources.'???

Director has Income from Salary, Rent, Interest, and Sitting fees.

So no business income as such, as far as we understand.

Another issue is, if we take Sitting Fees as business income, then we have to go for ITR3, which will also restrict our options to change new/old regime in future, due to business income.

Question:

1) What is right thing to do, Show sitting fees as 'Business income' or 'Income from other sources.'

Note: Consultant is insisting to show it as business income because TDS was deducted u/s 194J, asking us to take responsibility on ourselves by giving him in writing if we want to show it as "income from other sources".

Question:

2) Is it okay to give consultant in writing that it is our decision to show sitting fees as "Income from other sources".


Replies (4)
Quick Summary
Director sitting fees received from a company, on which TDS is deducted under Section 194J, is generally taxable under �Income from Business or Profession� (PGBP) as it is treated as professional income, not �Income from Other Sources.� Accordingly, it should be reported under ITR-3 if applicable.

Sitting fees which are given by company to its directors is treated as professional fees and company is required to deduct TDS @ 10%. The director need to declare it u/h. PGBP.

Shree Dhirajlal Rambhia,

Thank you, Sir, for your prompt reply, your responses are always concise and helpful.

Many of my questions are resolved by reading your replies to others, and it is always pleasure to read your replies.

Thank you once again.

You are welcome.            

Originally posted by : Manoj Punjabi
opening quote Shree Dhirajlal Rambhia,Thank you, Sir, for your prompt reply, your responses are
always concise and helpful.Many of my questions are resolved by reading your replies to
others, and it is always pleasure to read your replies.



Thank you once again.
closing quote


You are exactly correct Mr Manoj Punjabi...

We are gain knowledge from Mr Dhirajlal Rambhia Sir...


CCI Pro

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