If I have booked salary for executive director's every month and have deducted & deposited TDS every month u/s 192B but made semi annual payment of salary then is it liable to be deducted u/s 194J and is there any service tax liability?
Please explain
194J comes in place only if the executive director has provided any technical services to company.
Salary paid only to care of day to day operations will be dedcatble only under 129b.
Hence your assumption is not viable
As per clause 1(ba) of Sec 194 J, any remuneration or fees or commission by whatever name called, other than those on which tax is dedcutiable u/s192, paid to a director shall be liable to deduct tax @ 10%. If you refer Sec 198 & 309 of the companies act, director remuneration also includes commission, sitting fees paid to directotors. Hence we have to check the nature of payment made to directors, if tax is not deductiable u/s 192 , it shall covered under 194 J 1(ba).
1. service tax is also applicable on sitting fee paid to directors & this is covered under reverse charge mechanism so Co. need to pay service tax to the dept directly.
I have a query on Remuneration of directors:-
We do not book the monthly remuneration paid to the Directors every month. When fund is available we book, pay the TDS and transfer to their account. We are going through a fund crisis now. Is it necessary that we should create liability for all 12 months and pay TDS without actually making payment to the Directors. Is it ok if we do not book the liability and not pay TDS, till such time we are back to better days? This is for FY 2014-15.
Regards
Sudhakaran Nair
CAclubindia
