Salaries/ consultations to trustees
Querist :
Anonymous
(Querist) 03 March 2010
This query is : Resolved
Dear Ma'am/ Sir,
Hello!
I write to you for guidance in revising the internal HR policies of the Public Charitable Trust I work for.
The trust has 3 trustees, all of whom are highly qualified professionals in their respective fields. Currently, the trust is implementing a project funded by other national and international funding agencies. As the involvement of the three trustees is on daily basis and the work they are doing for the said project is what they would do anywhere as professionals, we are trying to figure out if they can be paid "reasonable" charges for their services which are out of the scope of administering the trust as trustees.
For almost a year, we also tried working without them, but as the team is not yet able enough to undertake such a project on their own, we had to request them to commit extensive time to the activities of the project- time that in normal circumstances would generate income for them. This is happening on daily basis for two and twice a week basis for one of the trustees. As a result, the first two are unable to take up any jobs outside.
We are aware that Section 12AA has specific conditions to tax exemption but at the same time sub section 3 informs that trustees may be paid a salary or consulting fees within reasonable amount of that they would be paid anywhere else. The three trustees are charging much less than what they would get, either in private practice or elsewhere in an organization.
Please let us know what is the right way of going about in this case.
Thank you,
Suzan Fernandes
Manager-HR
A V Vishal
(Expert) 03 March 2010
If the remuneration is reasonable and for the professional services, the trustees can be granted remuneration
Raj Kumar Makkad
(Expert) 04 March 2010
Trustees can very well get the remuneration well within the law.
Querist :
Anonymous
(Querist) 05 March 2010
Thank you for your prompt help and guidance in this matter.
Suzan
G. ARAVINTHAN
(Expert) 08 March 2010
Trustees can be provided with remuneration for their work
