|QUERY:||Pursuant to corporate governance norms of SEBI, listed companies are required to appoint Non-executive Independent Directors who may be industrialists or professionals like Advocates, CAs, etc. They are paid sitting fees for attending board meetings of the company. They are also paid a commission based on percentage of net profits of the company. Whether such payments are liable to TDS and if yes, under which section|
|ANSWER:||– Non-executive Independent Directors are providing managerial services. Hence, Explanation 2 to section 9(1)(vii) would be applicable, which reads as under:
“Fee for technical services” means any consideration (including any lump sum consideration) for rendering any managerial, technical or consultancy services”.
– Therefore, tax is to be deducted on sitting fee and commission paid to non-executive director, under section 194J.
|EXPERT:||CA. H. N. Motiwalla|
|CATCH WORDS:||SEBI, tax deducted at source|
Opinion Of Eminent Legal Luminaries On Controversial Issues
Whether TDS Is Required To Be Deducted On Directors Remuneration?
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