Esi & pf applicability in case of direct contractors

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AJK (Querist)
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19 December 2012 Hi

A co (IT) has hired many people, who are direct contractors, meaning they are paid prof fees & co deducts TDS u/s 194 J. for those direct contractors, whose fees are less than Rs 15000 pm, ESI is deducted mthly.1 doubt - in this case
- is ESI deduction correct (as tds is being deducted under 194J)
- there is no PF being deducted. Is it correct?
- Kindly assist on same

Ram Avtar Singh

Ram Avtar Singh (Expert)
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19 December 2012 Both are correct

EPF not applicable above 6500/-
ESI applicable up to 15000/-

You are paying monthly it meens employee & employer relation on comtact basis.