How can a Pvt Ltd company owner pay themself a salary and then reinvest that back into company

1047 views 3 replies

Pradeep V

User

21 Points Joined April 2024

I have a newly incorporated Pvt Ltd company, where I am the majority share holder, I want to show that I am paying myself a salary through the company as a director or CEO, but also want to inject that money back into the company to aid it's growth, as there is no profit right now.

If I'm paying myself a total of 51,000 per month, Is it benificial to show the basic salary as a lower amount and the remaining as incentives, could you confirm what taxes would be applicable, on either the company or me, and if there is any way to get any relief on those taxes.

Also what would be the correct method to reinvest the salary I receive back into the company by also keeping any taxation applicable to a minimum.

Any of your expert help would be highly appreciated, thank you.

Replies (3)

RAJA P M

"Do the Right Thing...!!!"

128116 Points Joined January 2015

Well...

1. Yes, You can take salary as Director Salary. No issues for this.
In Your side of Taxation view it's calculated as "INCOME FROM SALARY" and Income Tax is based in Slab Rate.

In company's book it's a Expenditure like "DIRECTOR SALARY"

2. Yes, You can (reinvest) give amount as loan to company through Current Account** and You can withdraw the amount at anytime. No issues in this transaction.

Harish varun

228 Points Joined May 2022

As a Private Limited Company owner, you can pay yourself a salary by officially designating yourself as an employee or director and issuing a salary through the company’s payroll. Once you receive the salary, you can reinvest it back into the company by purchasing additional shares or providing a loan. Ensure that all transactions comply with the guidelines set during the private limited company registration and adhere to relevant legal and tax regulations.