TaxTMI 
TaxTMI 
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 ?
Taxability of commission - director
10 Sep 2009 
2 Replies 
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Director commission taxability: may be treated as managerial remuneration with payroll withholding, or no withholding for resident directors.
Treatment of profit based commission to an independent director hinges on classification: one analysis treats it as managerial remuneration when section 309 is read with section 198, making payroll withholding provisions applicable; an alternate analysis treats directorship as a non employee vocation so payments to residents may not attract TDS, while payments to nonresidents are subject to withholding as other sums under nonresident rules. (AI Summary)
Treatment of profit based commission to an independent director hinges on classification: one analysis treats it as managerial remuneration when section 309 is read with section 198, making payroll withholding provisions applicable; an alternate analysis treats directorship as a non employee vocation so payments to residents may not attract TDS, while payments to nonresidents are subject to withholding as other sums under nonresident rules. (AI Summary)