TDS for Consultant/Contract Employee

TDS 4062 views 6 replies

RAM VISWANATHAN

CONSULTANT

26 Points Joined October 2008

Dear All, I plan to move on with my career as an independent consultant [data analyst] One of my prospective future clients, would however like to hire me as a contract employee for 1 year, with fixed monthly payments (annual total to exceed 5 Lakhs) What % of TDS can they deduct? 2% or 10.33%? What can i claim as deductions given that in that scenario, there is no PF, gratuity, LTA, medical benefits, transportation etc. ? (it is just a lump sum amount per month - I would have no leaves too) To lessen my tax burden would it be beneficial if I start my own firm, and let the client hire the services of the firm? Any reply or contact information of CAs who can help me would be greatly appreciated. regards ram

Replies (6)

S.Srinivasaraghavan

Chief Financial Officer and Co

11318 Points Joined September 2007

Start your own firm to claim the benefits of business expenditure.

Guest

439855 Points Joined August 2012

Hi sir, I want a Tds's report with calculation which is deducted.

Ramakrishna

Financial Executive

438 Points Joined October 2007

Dear Mr.Diwakar Purohit!!

Please refer SO 890(E) dated 26.09.2000 wherein the service intended to be rendered by you i.e data analyst is covered under the IT enabled services for which TDS is attracted u/s. 194J of the IT Act.

Therefore, TDS at 10% is attracted in either way.

Any how, best wishes for floating your own independent firm.

Good Bye! Cheers!!

sanjeev

Manager- Accounts/Tax/Finance

229 Points Joined September 2007

Dear,

I wud suggest you to get tds deducted @ 10.00% plus surcharge and plus cess.

If you start your own firm only for this work then it would not be a wise decision as cost wud be very high which includes tax expense alos and other formalities for running the firm as well.

Moreover tax rate over firm is 30%+ SC+EC+HEC

Guest

439855 Points Joined August 2012

I am working as a contractor for a consulting firm. consulting firm is deducting 10.33% as TDS. the consultancy firm is not giving me any documents. What documents I should ask for my hirer. Need precious advice from CA's

Ramakrishna

Financial Executive

438 Points Joined October 2007

Dear Friend!

After TDS is being made from out of the payment due for you, the tax deductor is bound to issue you a TDS certificate in FORM 16A duly mentioning the details of total payment made by him, TDS deducted, its remittance to Govt., etc. In case, the dedcutor has not issued any such certificate so far, request for the same by now. Infact, the FORM 16A has to be issued within one month from the end of the month in which the deduction has been made for TDS. If the deductor is not willing to issue the said certificate even belatley, the matter can be brought to the notice of the local IT officer. IT law provides for penalty at the rate of Rs. 100/- per day of delay in the issue of the TDS certificate by the tax deductor.

Good Bye! Cheers!!