An employee director of a company was paid ₹5 lakh as a lump sum consideration for resigning from the directorship by XYZ Ltd. The amount so paid shall be treated in the accounts of the company as ..........

CS Executive · Tax Laws and Practice · PYQS · December 2018
An employee director of a company was paid ₹5 lakh as a lump sum consideration for resigning from the directorship by XYZ Ltd. The amount so paid shall be treated in the accounts of the company as ..........
(A) Deferred Revenue expenses
(B) Revenue expenses
(C) Capital expenses
(D) Gift to employee director

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B). Official source note: An employee director of a company was paid ₹ 5 lakh as a lump sum consideration for resigning from the directorship by XYZ Ltd. The amount so paid shall be treated in the accounts of the company as ............. (A) Deferred Revenue expenses (B) Revenue expenses (C) Capital expenses (D) Gift to employee director

Topics: Income Tax Act, 1961

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