Director salary vs dividend calculator India (FY 2026-27) — how to take money out of your company

Company profit for the year before any pay to you or your family (₹)

Company tax rate

Most small companies have opted for 22%.

Your shareholding (%)

Who in your family works in or owns the company?

Cash the family needs out of the company this year (₹)

About your family member

Choose a family member above first.

Your spouse works in the company

Their pay is for work using a professional or technical qualification they hold ?

What would you pay an outsider for your spouse's work? (₹ a year)

We assumed ₹12.75 lakh — the most one person takes tax-free; set it to the real market rate.

Your spouse's shareholding (%)

Default 0.

Did you give them those shares (or the money to buy them)?

Your spouse's other income (₹)

Default 0.

Past profits & other details other income ₹0

Your other income (₹)

Rent, interest, etc. Default 0.

Past profits kept in the company (₹) — counts for dividend and loans

Default 0.

Letterhead for the printed plan

Client name Company name

Your CA letterhead (optional) — saved on this device.

Firm name Address

FRN

M.No.

CA name

Your split

Family tax

—

Saved vs all-salary

—

In hand

—

Your split

Route	Amount	Who	Tax on it

Compare every route

Route	Company tax	Your tax	Family member's tax	Total	In hand

A loan to a shareholder with 10% or more is taxed as dividend up to the company's accumulated profits, even if repaid. Company law also restricts loans to directors.

Where your rate crosses the company's

Your salary	Your rate on the next rupee	Company's rate

Your rate includes cess and any surcharge.

Before you pay a family member

An appointment letter that sets out the duties.
Evidence of attendance and of work actually done.
Pay in line with what you would pay an outsider.
Salary through payroll, with TDS.
A board resolution fixing the pay.

Want your CA to set this up before 31 March? Karan's firm does year-end remuneration plans → cakarangupta.com

How this works

Personal tax uses the new-regime slabs for FY 2026-27 (section 202 of the Income-tax Act, 2025), the ₹75,000 standard deduction on salary, the rebate up to ₹12 lakh with marginal relief (section 156), surcharge at 10% / 15% / 25% above ₹50 lakh / ₹1 crore / ₹2 crore with the dividend share capped at 15% and marginal relief, and 4% cess. Company tax is 22% + 10% surcharge + 4% cess under the section 200 option, or 25% / 30% with 7% / 12% surcharge above ₹1 crore / ₹10 crore.

Salary to a director is an expense of the company; dividend comes out of post-tax profit and goes to every shareholder pro rata. A spouse's pay from a company the family controls 20% or more of is clubbed with your income (section 99) unless it is for their own professional or technical skill — that is your declaration. Dividends on shares you gave your spouse or son's wife are your income. A loan to a 10% shareholder is a deemed dividend in the borrower's hands (section 2(40)(e)). A relative's pay above a fair rate can be disallowed to the company. A whole-time director's salary is outside GST.

The tool tries every split of the cash you need in ₹25,000 steps, then refines the best one in ₹1,000 steps, and picks the lowest total of company and personal tax. It does not cover the old regime, MAT, perquisites, PF or more than one family member.

Car price, including GST and registration (₹)

Engine

Running cost a year — fuel, servicing, insurance (and the driver's pay, if any) (₹)

We assumed ₹15,000 a month; change it to your real figure.

Your salary from the company this year, before this car (₹)

Date you'll start using the car

More about the car and the company

Company tax rate

Default: the same as the Pay mix tab — 22% option.

A driver is provided (company pays or reimburses the driver)

Default no driver.

Years you'll keep the car

5 — the usual replacement cycle.

Company's profit this year (₹) — sets its surcharge

We assumed under ₹1 crore.

The car will be used only for company work, with a log of every trip ?

Letterhead for the printed comparison

Client name Company name

Your CA letterhead (optional) — saved on this device, shared with the Pay mix tab.

Firm name Address

FRN

M.No.

CA name

Your answer

Company car

—

Your own car

—

Difference

—

What each route costs

	Company buys it	You buy it

Resale is the same either way, so it's left out. ? "Your extra tax" is the tax on the perquisite and, if you buy it, on the funding salary.

Year by year

Year	Company's depreciation	Your tax on the company car	Your tax on the reimbursements

Why the GST can't be claimed back

GST on a car for carrying people can't be claimed back by a company unless it runs taxis, transport or a driving school. The GST Council's meeting of 8 Oct 2026 left this unchanged, so the GST is part of the cost whoever buys the car.

How this works

We count your company and you together as "your family"; only money paid outside — to the seller, the garage and the government — counts.
Company route: price and running costs, less the company's tax saved on depreciation and running costs, plus your tax on the perquisite.
Your own route: the company pays you extra salary that leaves you the car's price after tax, reimburses the running costs, and you pay tax on the salary and on any reimbursement above the tax-free amount.
Resale is the same either way. Rupees are not discounted. Years after the first assume the same salary and rates.

Cars are depreciated at 15% a year on the reducing balance — half that in the first year if the car is used for less than 180 days before 31 March. There is no additional depreciation on cars.

Company car with private use: ₹5,000 a month (up to 1.6 litres, or electric) or ₹7,000 a month (above 1.6 litres), plus ₹3,000 if a driver is provided — up from ₹1,800 / ₹2,400 / ₹900. Your own car: the reimbursement above those same amounts is taxed. The month you start using the car counts in full.

Rules: Income-tax Rules, 2026, Rule 15; Income-tax Act, 2025, s.33; CGST Act, s.17(5)(a).

A comparison under the Income-tax Rules, 2026 and the FY 2026-27 new-regime rates as at 11 Oct 2026, for a director who draws a salary. It ignores resale (the same on both routes) and interest. Not advice for your facts — check it with your CA before you book.

Want your CA to set up the car policy and payroll? Karan's firm does this → cakarangupta.com