Employment of assistant

Tax queries 406 views 2 replies

Chandresh Sanat Jatania

Chartered Accountants

116 Points Posted on 13 November 2014

Hi.

I have a certain query and would be highly obliged if anyone could help me with the solution.

A director of a private limited company wants to hire a private assistant / secretary for himself who would help him in his office related duties and also take care of his personal records. His other sources of incomes include income from firms as a partner, rental income, capital gains and bank interest.

What modes of payment (salaried / fees, etc) are available to him for hiring such a person considering the following additional details:

1. The private limited company is currently not making enough profits to justify such a hire.

2. If the person is hired and paid for by the firm(s), the other partners may object as he would be working exclusively for one partner.

One of the payment options is that he can pay the person from his own pocket. However this will be shown as personal withdrawals and cannot be claimed as expenses.

Request if you could provide with additional solutions available for the above. Also if such payment can be shown as an expense, what additional steps are to be taken with regards the same.

Thank you in advance.

Thanks and Regards,

CA CSJ

Replies (2)

Mihir

Wealth Manager

5293 Points Posted on 13 November 2014

I think salary of partner is chargeable to tax under business/profession, and so expenses paid for assistant can be claimed by him in his ITR.

Wait for more replies.

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Posted on 13 November 2014

If you hire him via company then you can claim such expenses in profit and loss account(even though you have inadequate profits, You may carry forward it as Business Loss). Even if company don't have enough profits to justify it, it will have enough cash to pay for him. Indeed even in firm you may have same situation but as you said you may have protest from other partners, It would be preferable to recruit him via company. But is not advisable to let him carry your personal work at company.