TaxTMI 
TaxTMI 
CONDITIONS TO BE FULFILLED FOR THE APPOINTMENT OF A MANAGING OR WHOLE-TIME DIRECTOR OR A MANAGER WITHOUT THE APPROVAL OF THE CENTRAL GOVERNMENT
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.... 1944); (iii) the Industries (Development and Regulation) Act, 1951 (65 of 1951); (iv) the Prevention of Food Adulteration Act, 1954 (37 of 1954); (v) the Essential Commodities Act, 1955 (10 of 1955); (vi) the Companies Act, 2011; (vii) the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (viii) the Wealth-tax Act, 1957 (27 of 1957); (ix) the Income-tax Act, 1961 (43 of 1961); (x) the Customs Act, 1962 (52 of 1962); &nbs....
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.... Explanation I.-For the purpose of this Schedule, resident in India includes a person who has been staying in India for a continuous period of not less than twelve months immediately preceding the date of his appointment as a managerial person and who has come to stay in India,- (i) for taking up employment in India; or (ii) for carrying on a business or vacation in India. Explanation II.-This condition shall not apply to the companies in Special Economic Zones as notified by Department of Commerce from time to time: Provided that a person, being a non-resident in India shall enter India only after obtaining a proper Employment Visa from the concerned Indian mission abroad. For this purpose, such person shall be required to furnish, along with the visa application form, profile of the company, the principal employer and terms and conditions of such person's appointment. PART II REMUNERATION Section I.- Remuneration payable by companies having profits: Subject to the provisions of section 197, a company havin....
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....ceding financial year before the date of appointment of such managerial person; (iii) a special resolution has been passed at the general meeting of the company for payment of remuneration for a period not exceeding three years; (iv) a statement along with a notice calling the general meeting referred to in clause (iii) is given to the shareholders containing the following information, namely:- I. General Information: (1) Nature of industry (2) Date or expected date of commencement of commercial production (3) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus (4) Financial performance based on given indicators &nb....
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.... Section III.- Remuneration payable by companies having no profit or inadequate profit without Central Government approval in certain special circumstances: In the following circumstances a company may, without the Central Government approval, pay remuneration to a managerial person in excess of the amounts provided in Section II above:- (a) where the remuneration in excess of the limits specified in Section I or II is paid by any other company and that other company is either a foreign company or has got the approval of its shareholders in general meeting to make such payment, and treats this amount as managerial remuneration for the purpose of section 197 and the total managerial remuneration payable by such other company to its managerial persons including such amount or amounts is within permissible limits under section 197. (b) where the company- (i) is a newly incorporated company, for a period ....
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....tion IV.- Perquisites not included in managerial remuneration: 1. A managerial person shall be eligible for the following perquisites which shall not be included in the computation of the ceiling on remuneration specified in Section II and Section III:- (a) contribution to provident fund, superannuation fund or annuity fund to the extent these either singly or put together are not taxable under the Income-tax Act, 1961 (43 of 1961), (b) gratuity payable at a rat not exceeding half a month's salary for each completed year of service, and (c) encashment of leave at the end of the tenure. 2. In addition to the perquisites specified in paragraph 1 of this section, an expatriate managerial person (including a non-resident Indian) shall be eligible to the following perquisites which shall not be included in the computation of the ceiling on remuneration specified in Section II or Secti....
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..... Explanation III.- For the purposes of this Schedule, ''family'' means the spouse, dependent children and dependent parents of the managerial person. Explanation IV.- The Nomination and Remuneration Committee while approving the remuneration under Section II or Section III, shall- (a) take into account, financial position of the company, trend in the industry, appointee's qualification, experience, past performance, past remuneration, etc.; (b) be in a position to bring about objectivity in determining the remuneration package while striking a balance between the interest of the company and the shareholders. Explanation V.- For the purposes of this Schedule, "negative effective capital" means the effective capital which is calculated in accordance with the provisions contained in Explanation I of this Part is less than zero. Explanation VI.- For the purposes of this Schedule:- ....