Conditions for appointment of managing/whole-time Director, etc. - Provisions of Schedule XIII inserted by the Companies (Amendment) Act, 1988 explained - Companies Law - Circular : No. 5,

Circular : No. 5, dated 15-9-1989. Subject:- Conditions for appointment of managing/whole-time Director, etc. - Provisions of Schedule XIII inserted by the Companies (Amendment) Act, 1988 explained As per Schedule XIII, the overall limit of perquisites and gratuity have been prescribed as under: Perquisites - Perquisites may be allowed in addition to salary and/or commission or both. In the case of persons posted at Bombay, Calcutta, Delhi and Madras, perquisites shall be restricted to an amount equal to the annual salary or Rs. 1,35,000 per annum, whichever is less. In the case of persons posted at other places, perquisites shall be restricted to an amount equal to the annual salary or Rs. 1,15,000 per annum, whichever is less. Category B - Contribution to provident fund, superannuation fund or annuity fund will not be included in the computation of the ceiling on perquisites to the extent these either singly or put together are not taxable under the Income-tax Act. Gratuity payable should not exceed half a month s salary for each completed year of service, subject to a ceiling of Rs. 1,00,000. It is clarified that the gratuity payable is over and above the value of perquisites payable in terms of Schedule XIII.