Fee received to an independent director is taxable income which head ? Business income or other sources income ?
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Fee received as Independent Director
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Quick Summary
Fees received by an independent director are taxable as "Income from Business or Profession". The company deducts 10% TDS under Section 194J, and 18% GST is payable by the company under the Reverse Charge Mechanism (RCM). You may claim applicable business expenses against this income.
Usually fees paid to Independent Director are not treated as salary since independent director is not an employee of the company. In normal course such fees(Including sitting fees & Commission if any) will be treated as income under “Profit and Gains from Business and Profession”. The TDS generally under Section 194J. The services provided by independent director will be liable to GST under RCM and GST payment would be made by the company.
Please provide the details whether your query is about filing ITR form or Tax treatment on specific payment( Sitting fee only, commission only, expenses reimbursement).
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