Income tax paid on Salary paid in outsourcing services

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Dear All, I am an outsourcing consultant. Companies keep their personnel on our roll. But I have found that now they deduct TDS even on the salary component that they are paying to us.

e.g. say Salary is 10,000 pm

My bill is like :

Salary Component       = Rs.10000

Service Charges @ 20%= Rs. 2000

Total =                         Rs.12000

 

Now in this case the Company(client) deducts TDS on Rs.12000 rather than on Rs.2000 (which is my income). The salary is the exact amount that I have to pay/transfer to the employee.

Advise, how do I handle this

 

Replies (2)
Please advise !
Your position is similar to Labour Contractor as far as TDS provision is concerned. Your clients are liable to deduct TDS u/s. 194C @ 2% + Surcharge + Education Cess on the Gross Amount.

You may obtain a certificate for deduction of TDS at Lower Rate from Your assessing Officer.

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