Tds on directors remuneration

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Sr. Manager Accounts
41 Points Joined April 2011

I have a confusion:

a) Our directors are paid salary on which we deduct tds u/s 192.

b) At the end of the year we pay them Commission of profits of the company which is restricted to 10% of profits of the company. Simply they are derived at the time of finalisation of books. they are calculated probably in the month of August every year. How we calculate TDS in march and under which section we should deposit the TDS. As per past practice we are taking both (salary + Commission) u/s 192.

 

Confusion is that we are paying them remuneration under the agreement and treat as their salary, now onwards should we deduct TDS us 194J (1) (ba) ...??

 

Answer with specific Logic please.

 

regards,

Sunil.

 

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On 30 April 2014 at 09:27 Report
Replies (9)
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Chartered Accountants
2015 Points Joined August 2010

Mr. Tuli

you should pay them salary and deduct TDS u/s 192 but commission is covered u/s 194 J (1) (ba)

`

and book commission exp. in F. Y. 2014-15 that is 10% on profits of P.Y. 2013-14 because you cant  wait till aug for filing and paying TDS return.

 

 

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On 30 April 2014 at 14:05
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Sr. Manager Accounts
41 Points Joined April 2011
What about gap in his income at personal level in financial year 2013 14
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On 30 April 2014 at 15:16
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Sr. Manager Accounts
41 Points Joined April 2011
This shud also be kept in mind that we have agreement to pay remuneration in shape of fix salary plus commission to whole time directors
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On 30 April 2014 at 15:19
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Chartered Accountants
2015 Points Joined August 2010

Mr. Tuli

 

check the following link

 

https://www.studycafe.in/p/the-newly-inserted-clause-1ba-of-194j.html

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On 01 May 2014 at 12:48
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Sr. Manager Accounts
41 Points Joined April 2011
At the outset point is we have agreement of payment with full time directors for reimb of salary and commission termed as reimbursement. Also commission is to be certified by board which happens in august every year and liability or provision to be made in march closing.
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On 01 May 2014 at 14:58
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accountant
26 Points Joined July 2012

I have a question in my mind i.e. TDS on Director's Remuneration has been deposited under section 192 B upto A.Y. 2014-15 as the remuneration is fixed monthly basis but from A.Y. 2015-16 it should be carried on or TDS on Director's Remuneration will be deposited under section 194J(1).

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On 07 May 2014 at 14:03
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Sr. Manager Accounts
41 Points Joined April 2011
No full time director s under 192 and others in 194 as the employees employers relation cannot be established.
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On 07 May 2014 at 14:40
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Student
31 Points Joined November 2012

As per 194J(a), if any remunaration or Commision paid/payable to Director, it has to be deducated TDS @ 10%. 

Please Correct me if i was wrong

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On 19 July 2016 at 11:54
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Chartered Accountants
2015 Points Joined August 2010

No, that section says remuneration or fee or commision by whatever name called. which is not in the nature of salary.

 

means 10% tds rate is not applicable on salary. 

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On 16 September 2016 at 16:15


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