Dear Sir,
We are having private limited Company. Would like to ask if the management intend to give commission to one of the Director of the Company for her performance during the year. Should Section 36(1)II is applicable for allowing as expenses deductable. Should Company get this commission expense as dedutable?
Please have your opinion on this.
Regards
Hitesh Mistry
Company Considers Section 36(1)II for Director's Commission Deduction; Ensure Compliance with Section 198 of Companies Act 2013 A private limited company inquired about the applicability of Section 36(1)II of the Income Tax Act for deducting a commission paid to a director for her performance. One respondent affirmed that it is allowable. Another advised ensuring the commission complies with Section 198 of the Companies Act, 2013, is performance-based, and not a substitute for dividends if the director is a shareholder. The respondent suggested documenting the director's contributions to justify the commission and prevent it from being disallowed as a dividend substitute. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
