Non executive director - tax implications

Pvt ltd 664 views 2 replies

Arvind

Others

31 Points Joined February 2014

Sirs and Madams,

A friend of mine has been appointed as a Non Executive Director (w/o Shares) as per the Appointment letter and the Form 32 Says they have filed as Designation of "director" under "professional" category. It is a Pvt. Ltd firm. He has been Provided a DIN. He has been provided a TDS and is given Salary. His employement started much before being offered directorship. What form must he fill his INDIVIDUAL TAX under? How do we figure out if he is a Non Executive director as per GOV records? Cause the form 32 just says Director. ? But the board resolution says Non Exec Director? Any help would be appreciated. I might consider consultation too.

Thanks

Replies (2)

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

Your query is not very clear. However, as I understand, your friend is getting monthly salary as a director. In such case it is to be taxed under the head 'Income from Salary' in income tax return. It has nothing to do with designation shown in company law records.

As regards company law, a director who is in whole time employment of the company is treated as Whole Time Director or Executive Director. A director who is not in whole time employment and not getting any remuneration by way of salary is usually treated as non-executive director. Such directors only get sitting fee, but may also be paid commission.

Arvind

Others

31 Points Joined February 2014

Thank you sir for taking time out to answer. So from what you are saying, I gather that my friend has to fill the standard ITR 1 or 2. He need not consider ITR 3 and above? (Eventhough he has a registered DIN Number) Is that correct? Have I understood you correctly?

Thanks