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TDS applicability on Rent

Lalit (accounts) (195 Points)

27 July 2009

In case of a Private Limited Company, in which Father & Son are director, Son is getting director remuneration. Whether is it necessary to get approval from CG under section 314 (1B)???

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21 Replies

Malav Shah (Company Secretary and AVP Legal) (171 Points)
Replied 27 July 2009

Section 314 is not applicable if you are paying Director's remuneration to his son. In any case Section 314(1B) is applicable to appointment of relative of Directors and not to Directors. So Central Government approval is not required.

Also as per explanation given u/s 314, a person is said to be "Holding of Office or place of profit" if he get a remuneration other than the remuneration entitled as Director.

I hope this will answer your query.

Regards.

Malav

Lalit (accounts) (195 Points)
Replied 27 July 2009

Originally posted by :Malav Shah
"	Section 314 is not applicable if you are paying Director's remuneration to his son. In any case Section 314(1B) is applicable to appointment of relative of Directors and not to Directors. So Central Government approval is not required. Also as per explanation given u/s 314, a person is said to be "Holding of Office or place of profit" if he get a remuneration other than the remuneration entitled as Director. I hope this will answer your query. Regards. Malav	"

Malav,

Son is director of the company as well as relative of director because his father is also director. In this case section 314(1B) is applicable or not because son is director of company and relative of director also

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 27 July 2009

Don't worry Lalit.

Section 314 is not applicable in your case as none of the director is holding Office or place of profit read with 314 (3).

Malav is correct in his analysis.

Regards

Lalit (accounts) (195 Points)
Replied 27 July 2009

Thanx

Hema Raviraj Ghadge (Sr. Accountant) (90 Points)
Replied 27 July 2009

Originally posted by :sukumar
"	Whether TDS on Rent is to be deducted if it donot exceeds Rs. 120000 p.a but Rs. 10000 p.m for a peroid of not more than 12 months	"

nothing to do with Rs. 10000/- p.m if it does not exceed 120000/- p.a then no tds

CA Kanagaraj R (CA, CS & CWA) (86 Points)
Replied 31 July 2009

Originally posted by :Lalit
"	In case of a Private Limited Company, in which Father & Son are director, Son is getting director remuneration. Whether is it necessary to get approval from CG under section 314 (1B)???	"

If the Remuneration received by the Son is in excess of the remuneration fixed in Articles of association and if the excess amount exceeds Rs. 50000/- only Central Government approval is required

Sunny Agarwal (Intern) (24 Points)
Replied 18 August 2009

In case of sec 314(1b) whether Prior SR or Subsequent SR is required for Rs 20000 or above remuneration. Please answer.

Ajay Mishra (Company Secretary) (74332 Points)
Replied 19 August 2009

Dear Mr. Sunny

Normally for appointment under sub-section (1) of section 314 the special resolution should be passed before the office or place of profit is held. But the first proviso to sub-section (1) permits that a special resolution according the consent of the company may be passed at a general meeting of the company held for the first time after the holding of such office or place of profit.

In other words, a person can hold office or place of profit first and special resolution to this effect may be passed later.

On the contrary under sub-section (1B), it is the prior consent of the shareholders by special resolution and the approval of the Central Government.

In other words, a person can not hold office or place of profit unless a special resolution and approval of the Central Government have previously been obtained.

Regards

Sunny Agarwal (Intern) (24 Points)
Replied 19 August 2009

Originally posted by :Ajay Mishra

Dear Mr. Sunny

Normally for appointment under sub-section (1) of section 314 the special resolution should be passed before the office or place of profit is held. But the first proviso to sub-section (1) permits that a special resolution according the consent of the company may be passed at a general meeting of the company held for the first time after the holding of such office or place of profit.

In other words, a person can hold office or place of profit first and special resolution to this effect may be passed later.

On the contrary under sub-section (1B), it is the prior consent of the shareholders by special resolution and the approval of the Central Government.

In other words, a person can not hold office or place of profit unless a special resolution and approval of the Central Government have previously been obtained.

Regards

Thanks Ajay. But my pecific query was what is the limit for Prior SR? Rs 20,000 or Rs 50,000.

Ajay Mishra (Company Secretary) (74332 Points)
Replied 20 August 2009

Dear Mr. Sunny

If a company appoint director or concerned persons on office or place of profit on a total monthly remuneration of Rs. 50,000 or more, it has to obtain consent of the members of the company by way of special resolution in the general meeting and with the approval of the CG.

Regards

CS Priti Rohira (intern) (44 Points)
Replied 21 November 2009

a note on section 314 attached

Attached File : 57 section 314.doc downloaded: 375 times

Vasant Patel (Proprietor) (47 Points)
Replied 30 December 2009

Dear Sir

I want to know

1 One closly held public Limited Company paying fees for consultany services of Rs. 5 Lacs PA to its Director who is CA. whther section 314 apply and if apply then what is limit and proecude.

If any Director who is receiving Consultancy fees of Rs. 500000/- PA