DIRECTOR'S REMUNERATION OF PVT. LTD. CO. and TDS on it
What is the limit of Director's remuneration in a Private ltd co. as per Company's Act 2013.
TDS on Director remuneration is not deducted and deposited within April 30 2015. is it ok if Income tax is paid by individual director on his total income and file ITR and produce certificate from CA
Certificate of accountant under first proviso to sub-section (1) of section 201 of the Income-tax Act, 1961 for certifying the furnishing of return of income, payment of tax etc. by the payee
CA M.S. Navale
Sec 197 of Companies Act, 2013 is applicable equally to Pvt Companies as well. Overall limit is 11% subject to Schedule V. Remuneration paid for Services rendered in professional capacity is not to be included for the purpose of 11%.
TDS on Director's remuneration is to be made u/s 194J(1)(ba). ie. flat rate of 10% irrespective of the amount paid ( i.e. 30000 slab rate not applicable). However, for MD and ED, 192 - TDS on salaries is still applicable.
The consequences of non-payment will be as under to the company:-
a. The expense will be disallowed u/s 40(a)(ia) of IT Act for professional fee.
b. Interest @ 1.5% PM will be levied for the period of delay in TDS payment.
c. Penalties can also be levied under the penal provisions of the IT Act if there is no reasonable cause for delay in TDS.