How do you calculate net profit for ascertaining managerial remuneration?

How do you calculate net profit for ascertaining managerial remuneration?

Section 198 of the Companies Act 2013 provides calculation of net profit of the company. The profit by way of premium of shares or debentures of the company which are issued or sold by the company. Profit on sale by the forfeited shares.

How do you calculate CSR profit?

CSR Expenditure of a company for a particular year is determined as 2 per cent of the average profit over preceding three financial years. As per the CSR laws, the 2 % of the average profit is calculated as profit before tax.

How do you calculate profit for the purpose of the calculation of the managerial remuneration?

Now the companies act 2013 made it mandatory to consider the net profit calculated u/s 198 of the act for CSR also….How to Calculate Net Profit for Managerial Remuneration.

What is managerial remuneration how much maximum percentage of net profit payable to different categories of managerial personnel?

11%
The Company may pay the remuneration to the managerial personnel exceeding total limit of 11% of net profit with the approval of members at the general meeting subject to the provisions of Schedule V of the Companies Act, 2013.

Is section 196 applicable to private companies?

G.S.R. 463(E) dated 5th June, 2015. Shall not apply to a Government Company and Private Company and specified IFSC Public Companies vide notification no. G.S.R.

Is section 135 applicable to all the companies?

Yes, the CSR provisions apply to a company registered for a charitable purpose under Section 8 of the Companies Act, 2013. Section 135(1) of the Act states that every company having the specified net worth, turnover, or net profits must establish a CSR committee.

What is net profit as per CSR applicability?

The Board of Directors shall make sure that the company spends in every financial year, minimum of 2% of the average net profits made during the 3 immediately preceding financial years as per CSR policy.

Which section lays down the manner of calculation of net profit of a company in any financial year for the purpose of both CSR and managerial remuneration?

Section 198 lays down the manner of calculation of Net Profit of a company in any financial year for the purpose of both CSR and Managerial Remuneration.

What is the maximum limit of the managerial remuneration according to Section 198 of the Companies Act?

eleven per cent
(1) The total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its managing agent, secretaries and treasurers or manager in respect of any financial year shall not exceed eleven per cent.

What is the maximum remuneration of managing director of a company?

Maximum remuneration for a Director:

Can a board appoint a whole time director?

No company shall appoint or re-appoint any person as its Managing Director or Whole-time Director for a term exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of his term.

What is Section 198 of the Companies Act 2013?

Section 198 of Companies Act, 2013 – Calculation of profits. ( d) profits from the sale of any immovable property or fixed assets of a capital nature comprised in the undertaking or any of the undertakings of the company, unless the business of the company consists, whether wholly or partly, of buying and selling any such property or assets:…

What is Section 198 of the Income Tax Act?

Section 198. Calculation of Profits (1) In computing the net profits of a company in any financial year for the purpose of section 197,— ( a) credit shall be given for the sums specified in sub-section (2), and credit shall not be given for those specified in sub-section (3); and

How to calculate the net profits of a company under Section 197?

Calculation of Profits (1) In computing the net profits of a company in any financial year for the purpose of section 197,— ( a) credit shall be given for the sums specified in sub-section (2), and credit shall not be given for those specified in sub-section (3); and

How to calculate net profit for CSR contribution as per Section 198?

Computation of Net Profit for CSR contribution as per Section 198 Particulars Net profit after tax* Add : Allowed Credits 1 Profit on sale of immovable property ( Original Cost – WDV )