Why should any promotor fix their annual salary at lower level and take rest of the money through dividend?
Take a case study:
PBT (minus salary) of a company = 100 Salary = 0 Corporate tax= Approx 33/- Divedend tax= 12.5% of 67 = 8.4 Money in the hand of with the promotor: 100-33-8.4=58.6 (tax free)
PBT (salary not included) of company: 100 Salary: 100 Corporate tax: 0 Dividend tax: 0 Personal Tax of promotor: 30 Money in the hand of promotor:60 the benifit of tax slab and 80C
Neither IT nor promotor should think in this front
RE:Low salary by promotors?
by Brajesh kumar on Feb 18, 2008 10:45 AM Permalink
Sorry, I made a mistake. In the second case Money in the hand of promotor is 100-30=70 Plus the benefit of tax slab and 80C
