TAX AUDIT
TAX AUDIT
TAX AUDIT
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Clause 16<br />
(a) Any sum paid to an employee as bonus or commission for<br />
services rendered, where such sum was otherwise payable<br />
to him as profits or dividend. [Section 36(1)(ii)].<br />
This provision is intended to check private companies from<br />
avoiding tax by distributing its profits to the shareholders in the<br />
guise of salary or to other remuneration by merely showing<br />
them as employees<br />
Bonafide payment to a shareholder for services actually<br />
rendered would be allowed<br />
When any shareholder is paid any salary, his employment<br />
contract, nature of services actually rendered be verified<br />
KALYANIWALLA & MISTRY
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