Foreign education expense of director/owner ' son in private limited

there is a private limited company in the business of manufacturing of utensils. the director cum owner is sending his son to UK for bachelor degree in finance and operations. he wants to book the foreign education expenses in the company. can he do that?

PS: the son has never worked in the company in past.

Replies (1)

Some points to consider:

  1. The company can pay for the foreign education expenses of the director's son only if it is authorized by the Articles of Association of the company or by a special resolution passed by the shareholders.

  2. The payment made by the company towards foreign education expenses will be treated as a perquisite in the hands of the director and will be taxable in the director's hands. The company will also have to deduct TDS on the payment made.

  3. The company can claim the foreign education expenses as a business expense and set it off against its business income, but it should be done only if it is incurred for the purpose of business and if it is reasonable in amount.

It is advisable to consult a chartered accountant or a tax expert for guidance on the matter to ensure compliance with the relevant laws and regulations.

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