Section 198 - Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits.

Managerial remuneration limits: company capped at statutory percentage of net profits; prior government approval required if profits absent.

Section 198 limits managerial remuneration for public companies and their private subsidiaries to a statutory percentage of net profits computed under the profit computation rules, excluding director fees under the separate provision. Within that maximum, companies may pay monthly remuneration to managing or whole time directors and managers under the relevant statutory provisions. If a company has no profits or inadequate profits, remuneration to directors and managers requires prior Central Government approval. 'Remuneration' is defined to include rent free or concessional accommodation, other free or concessional benefits, company borne obligations or services, and insurance, pension, annuity or gratuity expenditures.