JAYANTA KUMAR BANDYOPADHYAY (professional service) (293 Points)
08 January 2010A small company is periodically employing unskilled labour on a continuous basis and paying roughly Rs.150 on a daily basis. Since voucher payment is made, does it attract any kind of tax at source ?
Please advise.
Amir
(Learner)
(4016 Points)
Replied 08 January 2010
Dear Jayanta,
1) if casual labour is employed through any agency then on the bill of that Agency, TDS will be attracted u/s 194 C subject to a threshold limit of Rs. 20,000/ bill or Aggregate of such bills is Rs. 50,000 in a Financial Year.
2) If casual labour is employed directly by the company then,It has to be seen whether this labour will be termed as employee or contractual labour..Criteria is whether u r deductig PF, ESI on these payments or not..If yes then they will be termed as Employee otherwise contractual labour..
If employee then annual payments will be around Rs. 54,000 /employee - NOTDS is required since it is below exemption limit.
If contractual labour then TDS will be attracted u/s 194 C since annual payments crosses Rs. 50,000
CA Ayush Agarwal
(Kolkata-Pune-Mumbai)
(27186 Points)
Replied 08 January 2010
agree with amir..........................
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 08 January 2010
With addition to Mr. Amir
As per day payment is Rs. 150 which means that monthly payment willbe Rs. 4500. So in this case PF will be applicable to employees under EPF Act, 1952, if EPF Act is applicable for business.
CAclubindia
