Service tax on director's remuneration



Service Tax on Director's Remuneration: The introduction of Negative List in case of Service Tax has rendered every service taxable except for those mentioned in the Negative List. Also sec 194J(1)(ba) has been introduced in the Income Tax Act, 1961 for deduction of tax in case of any remuneration or commission paid to the Director. This implies that the intention of the Law is to treat any remuneration or commission paid to the director shall be in the nature of Professional Fees. The following are the questions that have arised:

  • Is the remuneration paid to the Director in the normal course (not in the nature of the Commission or sitting fees) to be treated as Salary Income or shall it be treated as Income under the head "Profits and Gains from Business and Profession"?
  • If the same has to be conisdered as income under the head "Profits and Gains from Business and Profession" then is Service Tax Applicable on such receipts?

Kindly help me out with the same.

 
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