Director gross income

What is Director Gross Income?

Director Gross Income refers to the total earnings of a company director, including salary, sitting fees, commissions, and perquisites. It is computed before deductions like TDS or contributions.

Key Features:

• Components: Fixed salary, performance bonuses, profit-based commissions, and perquisites.
• Taxation: Fully taxable under “Income from Salary” (if whole-time director) or “Income from Other Sources” (if non-executive).
• Compliance: Subject to limits under the Companies Act, 2013 and Income Tax Act.
• Disclosures: Must be reported in Form 16, financial statements, and annual filings.

Example

A Managing Director earns ₹15 lakh salary, ₹3 lakh bonus, and ₹2 lakh perks → Gross Income = ₹20 lakh, subject to TDS.

Why It Matters:

It ensures legal and transparent disclosure of executive compensation, aligning with corporate governance norms.