Taxability of commission - director

[Purshottam Agarwal]

I wish to know if any TDS is applicable for the payment made by a company to its independent (non executive) director in form of commission calculated in terms of percentage of profits as per the provisions of sectoin 309 of the Companies Act?. Further under which head the said commission will be taxable in the hands of such director ?

AI Summary

Debate on TDS Applicability for Independent Directors' Commission under Sections 192, 194C, 194H, 194J, and 195. A query was raised regarding the applicability of Tax Deducted at Source (TDS) on commission paid to an independent director, calculated as a percentage of profits under section 309 of the Companies Act. One response highlighted that such commission, when considered alongside section 198, is managerial remuneration and subject to TDS under section 192. Another response argued that since directors are not employees, the commission is not salary under section 192, nor does it fall under sections 194C, 194H, or 194J. For non-resident directors, section 195 would apply as the commission is categorized as 'any other sum.'