As a director-shareholder you can be paid several ways — salary, sitting fees, interest on loans you give the company, rent for premises you own, dividends. Each route has different tax consequences at both ends.
The menu and its treatment
- Salary: deductible for the company; taxed as salary for you, with TDS obligations
- Professional/sitting fees: deductible; taxed as your professional income with its own TDS section
- Interest on director loans: deductible within reason; taxed as your other income; TDS applies past thresholds
- Rent for your premises: deductible; property income for you with standard deduction benefits
- Dividends: not deductible for the company; taxable in your hands — usually the least efficient rupee
The two-level optimisation
Every rupee of company profit reaches your pocket through one of these doors — total tax depends on the door. The right mix considers company rate, your slab, and compliance cost together.
Guardrails
Reasonableness, board approvals where required, and actual payment trails keep structures defensible.
We optimise owner-company remuneration annually — tax planning service · book a review.
