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Taxation in a company

Mukesh Bajaj (5 Points)

24 January 2020  
how much income tax is charged on the directors , as they get salary? as my concern is that in a sole proprietorship the owner pays the tax as per the profits earned by the firm in a financial year , how it goes in a company ?

 5 Replies

Roshni (Studwnt) (1141 Points)
Replied 24 January 2020

Normal slab rate applies. however TDs had to be deducted under sec 192

Kapadia Pravin (17209 Points)
Replied 24 January 2020

In a Company both Company and Directors are different entities.

A Director getting salary is in capacity of an Employee. It's Salarexpenditure for Company.

Whereas in proprietory company, both proprietor and owner are same.

Mukesh Bajaj (5 Points)
Replied 24 January 2020

So the profit of the company is considered the income of directors ? and they are liable for taxes ?

Roshni (Studwnt) (1141 Points)
Replied 24 January 2020

Director gets a fixed pay...profit of company is of shareholders.

SIVASIVA (FCA, Future CA) (4930 Points)
Replied 24 January 2020

Director in a company will have to pay taxes on Salary income plus Capital gains income from sales of his shares if any plus other Gifts/Incentives covered under 'Income from other sources'

For sole prioprietors, it is taxed under 'income from business'.   

TDS will play a major role for Director's while submitting returns.  


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