The Ministry of Corporate Affairs vide Notification No. S.O. 1256 (E), dated 18-3-2021, has amended Schedule V to the Companies Act, 2013, in Part II that deals with Director remuneration. By the amendment, the limit has separately prescribed in regard to the remuneration to non-executive director or an independent director. Till now no separate limit in this regard was prescribed.
The amendments made are briefed as under:
- The words “or other director” has been added after the words “managerial person”, wherever occurred, in Section I, Section II and Section III of Part II of Schedule V to the Companies Act (except in clause (i) of the proviso to Section III of Part II of Schedule V to the Companies Act)
- Further, in Section III of Part II of Schedule V to the Companies Act, an explanation has been added stating “For the purposes of Section I, Section II and Section III of Schedule V to the Companies Act that the term “or other director” shall mean a non-executive director or an independent director”.
- The Revised limit of maximum remuneration payable by companies having no profit or inadequate profit to managerial person and other director has been fixed as under:
| Sl. No. | Where the effective capital (in rupees) is | Limit of yearly remuneration payable shall not exceed (in Rupees) in case of a managerial person (NO CHANGE) | Limit of yearly remuneration payable shall not exceed (in Rupees) in case of other director (NEW INSERTION) |
| (i) | Negative or less than 5 crores. | 60 lakhs | 12 Lakhs |
| (ii) | 5 crores and above but less than 100 crores. | 84 lakhs | 17 Lakhs |
| (iii) | 100 crores and above but less than 250 crores. | 120 lakhs | 24 Lakhs |
| (iv) | 250 crores and above. | 120 lakhs plus 0.01% of the effective capital in excess of ₹ 250 crores: | 24 Lakhs plus 0.01% of the effective capital in excess of ₹ 250 crores: |
Also Read: All about Reverse Charge Mechanism (RCM) on Director remuneration / Services
For Notification CLICK HERE
Follow us for free tax updates : facebook Twitter
***
Subscribe our portal and get FREE Tax e-books , quality articles and updates on your e-mail.
Resolve your GST queries from national level experts on GST free of cost.
TW Editorial Team comprises of team of experienced Chartered Accountants and Advocates devoted to spread the knowledge of GST amongst the various stakeholders.
