tax levy on incentive paid to director who is not being paid regular salary

[V Sathyanarayan]

is there levy of tax on incentive of Rs.2cr paid to managing director of private company who is not being paid salary by the company. If so, what rate

AI Summary

Tax Implications of Rs. 2 Crore Incentive to Director Without Regular Salary: Is Reverse Charge Mechanism Applicable? A discussion on a tax levy concerning a Rs. 2 crore incentive paid to a managing director of a private company who does not receive a regular salary. The primary issue is whether the company is liable to pay tax under the reverse charge mechanism (RCM) if the employer-employee relationship is not established. One expert references Notification No. 13/2017, indicating a tax liability under RCM for services supplied by a director. Another expert questions the director's role, suggesting liability varies based on the nature of services provided. The consensus is that tax liability depends on the agreement between the company and the director.