Personal Expenses of Directors

personal expense of the director of  a pvt company cannot be deducted as per income tax & accountancy unless if they are agreed as per the contract.....

Look there are 2 things as regards to Personal Expenses of Director:-

1) IF COMPANY HAS SPECIFICALY AGRRED TO BEAR THE PERSONAL EXPENSES OF DIRECTOR THAT IS TO SAY THAT THERE IS NO MANIPULATION TO INCREASE THE EXPENSES, THEN IT IS ALLOWED AS DEDUCTION IN INCOME TAX  AND  NO ADDITIONAL RESPONSIBILITY IS THERE ON THE AUDITOR..

2) IF PERSONAL EXPENSES HAVE BEEN DEBITED TO PROFIT/LOSS A/C AS A MEANS TO REDUCE PROFIT THAT IS TO SAY THERE IS MANIPULATION,  THEN SUCH EXPENSES WILL NOT BE ALLOWED AS DEDUCTION UNDER INCOME TAX..FURTHER AUDITOR IS REQUIRED TO CLEARLY MENTION THE FACT IN HIS REPORT OR QUALIFY IT AS MAY BE APPROPRIATE.

Originally posted by : Amir
	Look there are 2 things as regards to Personal Expenses of Director:- 1) IF COMPANY HAS SPECIFICALY AGRRED TO BEAR THE PERSONAL EXPENSES OF DIRECTOR THAT IS TO SAY THAT THERE IS NO MANIPULATION TO INCREASE THE EXPENSES, THEN IT IS ALLOWED AS DEDUCTION IN INCOME TAX AND NO ADDITIONAL RESPONSIBILITY IS THERE ON THE AUDITOR.. 2) IF PERSONAL EXPENSES HAVE BEEN DEBITED TO PROFIT/LOSS A/C AS A MEANS TO REDUCE PROFIT THAT IS TO SAY THERE IS MANIPULATION, THEN SUCH EXPENSES WILL NOT BE ALLOWED AS DEDUCTION UNDER INCOME TAX..FURTHER AUDITOR IS REQUIRED TO CLEARLY MENTION THE FACT IN HIS REPORT OR QUALIFY IT AS MAY BE APPROPRIATE.

I agree wid Amir..

Further, i want to clear it little more..

Section 227(1A) of Companies Act provides the Auditors Duties (of six enquiries). One of them is related to personal expenditure.

If Personal expenditure over n above the terms conditions of employment, are being debited to P&L A/c, then the Auditor shud qualify his report.

Adarsh

Hello Friends

Suppose the personal expenditure of directors was born by the company - the same is disallowed as per the income tax for the company

but whether the same is treated as income under head salary ( perquisite ) ?

please reply 

thanks 

i think the personal expenses of Directors are disallowed in the hands of the company while calculating the income tax.

Dear All mitra,

Suppose a Director gives a present to his frend as marriage regards, is this exps allowable to the Company??

Pls tell.

sir,

Health insurance paid towards directors of private company is allowable??