Taxation provision for contractual employees
This query is : Resolved
30 June 2016
Hi!
In reference to the subject line may I request you to let me know the section under which Income Tax, if any, to be deducted from the salary / remuneration of the Contractual Employees with minimal educational and no technical qualifications
In context to above, I would like to add that to each and every contractual employee's proper Appointment Letter was issued signed and acknowledged by the competent authority and employee concerned respectively.
Thank you for your time and attention.
In reference to the subject line may I request you to let me know the section under which Income Tax, if any, to be deducted from the salary / remuneration of the Contractual Employees with minimal educational and no technical qualifications
In context to above, I would like to add that to each and every contractual employee's proper Appointment Letter was issued signed and acknowledged by the competent authority and employee concerned respectively.
Thank you for your time and attention.
01 July 2016
Section 192 TDS applicable for the salary/remuneration paid to contractual employees.
01 July 2016
Thank you very much, Mr. Seetharaman for the cooperation extended...
In regard to my query A Chartered Accountant from Kolkata has advised us to deduct TDS U/s 194J from the salary of the contractual employees without any detailed clarification.
Thank you once again.
In regard to my query A Chartered Accountant from Kolkata has advised us to deduct TDS U/s 194J from the salary of the contractual employees without any detailed clarification.
Thank you once again.
01 July 2016
194J is applicable for qualified professionals/technical consultants.
01 July 2016
With due respect to Mr. Seetharaman, I would like to request another expert to share their point of view regarding my concern. I am anxious as because the Chartered Accountant associated with us has different point of view.
Thank you for your understanding.
Thank you for your understanding.
01 July 2016
Hello Subhashish,
I would like to add some comments after Sitharaman Sir, TDS under different sections are based upon nature of expenses.
here is nature of expenses as per your query is "Salary", It means you are booking cost under head of salaries so it will attract TDS on salaries which u/s 192
as per your consultant he feels that expenses should be booked under head of professional/technical services and TDS should be deducted u/s 194 J.
Now it is already seen that these people are not technically qualified hence paying them as professional services may attract some problem in future.
I will suggest you to avoid all the complexity, you must hire one agency (may be dummy) and pay them the amount to that agency and that agency will pay these employees as salary. You will simply deduct 2% or 1% whatsoever case u/s 194 c to that agency. That agency will pay them deduct necessary TDS for salary.
It will give you benifit that you will be contractually declare them not as your employee but you have hired them through third party.
I would like to add some comments after Sitharaman Sir, TDS under different sections are based upon nature of expenses.
here is nature of expenses as per your query is "Salary", It means you are booking cost under head of salaries so it will attract TDS on salaries which u/s 192
as per your consultant he feels that expenses should be booked under head of professional/technical services and TDS should be deducted u/s 194 J.
Now it is already seen that these people are not technically qualified hence paying them as professional services may attract some problem in future.
I will suggest you to avoid all the complexity, you must hire one agency (may be dummy) and pay them the amount to that agency and that agency will pay these employees as salary. You will simply deduct 2% or 1% whatsoever case u/s 194 c to that agency. That agency will pay them deduct necessary TDS for salary.
It will give you benifit that you will be contractually declare them not as your employee but you have hired them through third party.
01 July 2016
Employer Employee relationship is always contractual. If they are your employee then TDS has to be deducted under section 192 only.
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