Is TDS applicable to Director's sitting fees?(Sitting Fees recd. by Individual is Rs.245000 in a year)
If yes,Under which Section?
Clarify about the meaning of Managerial under 194J.Circular/Notification/Case must be mentioned for better understanding.
Director are authorized reprentative of the company ,any income get from company as a part of salary
Deduct TDS under sec 92B
Director sitting fees are charged to tax under income from other sources in the hands of directors , hence TDS under 192B is not appropriate.
Moreover, Employer-Employee relation is a must for attracting the provisions of Taxation under the head of Salaries.Director is a representative of shareholder while attending the meeting and not employee of the employer(Company).
Dear Goutam, how can you say that the director is not an employee of company. Director is managing the day-to-day affairs of the company, for which he is being paid salary by the company & the company issues Form16 to the director. Hence director will be considered an employee of the company.
Hence sitting fees will be considered as a part of the director's salary & TDS u/s 192B shall be deducted.
What about sitting fees received by Part time directors.
Regards,
If the part time director is an employee of the company, then definitely it would be considered as part of the salary & TDS would be made accordingly. In other case it would be considered as income from other source.
any amount paid to the director as sitting fees will not be the part of his salary but it will be considered as seperate amount paid to him and the same is liable for the TDS under section 194J.......
any amount paid to the director as sitting fees will not be the part of his salary but it will be considered as seperate amount paid to him and the same is liable for the TDS under section 194J.......
any amount paid to the director as sitting fees will not be the part of his salary but it will be considered as seperate amount paid to him and the same is liable for the TDS under section 194J.......
I had prepared this reply for one of the clients: Hope it helps.
Sec 194J says that “technical services” shall have the same meaning as given in Explanation 2 to Sec9 (1)(vii) of the Income Tax Act.
Explanation 2 to Sec 9(1) (vii) says:
“Fees for technical services” means any consideration for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head Salaries.
Under Companies act, Director is treated as a managerial personnel and he is not employee of the company.
As per clause (13) of section 2 of the Companies Act, 1956, "director" includes any person occupying the position of director, by whatever name called. Further, clause (24) to section 2 of the said Act, "manager" means an individual (not being the managing agent) who, subject to the superintendence, control and direction of the Board of directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called and whether under a contract of service or not;
Further sitting fees cannot be treated as salary as there is no employer - employee relationship. Hence the sitting fees paid to Directors cannot be subjected to section 192.
From the above facts it can be concluded that, a Director is also a manager under the provisions of Companies Act, 1956. And hence, sitting fees paid to such directors shall be subject to Section 194J.
Can anyone clarify on this.
Directors sitting fees is liable for deduction u/s 194J.
But whether any reimbursement of expenses by the company to such director attending meeting can be considered as director sitting fees and can be held liable for tds u/s 194J
Thanks in advance
CAclubindia
