How much salary can a director draw?

The Government's view is that where directors receive fees for Board meetings attended by them, proposal for payment of commission or other remuneration to them would mean increase in remuneration under section 310. However, where the directors do not receive Board meeting fees or other remuneration, Central Government's approval is required as any remuneration proposed to be paid will be deemed to be an increase in remuneration and will require approval of the Government under section 310 and also approval of members by special resolution.       As per provisions of Section I of Part II of Schedule XIII to the Companies Act, 1956, subject to the provisions of sections 198 and 309, a company may pay any remuneration, by way of salary, dearness allowance, perquisites, commission and other allowances, which shall not exceed 5% of its net profits for one such managerial person, and if there is more than one such managerial person, 10% for all of them together.   Section 309(3) provides that managerial personnel may be paid remuneration either by way of a monthly payment or at specified percentage of the net profits of the company or partly by one way and partly by the other. In case if remuneration exceeds 5% or 10% as the case may be, it cannot be paid without the approval of the Central Government.

 

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In case of absence of any profits in a financial year Section 197 of Companies Act shall govern the remuneration structure.

https://www.mca.gov.in/SearchableActs/Section197.htm