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TDS for Consultants

Valli (Student -CWA) (157 Points)

16 January 2010

Hi!

I am going to pay Rs.5000/- as consultant fee per month. Please let me know how to deduct TDS for him? What is the rate? Whether it is deducted be on monthly basis or yearly basis.

Thanks in advance

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9 Replies

FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 16 January 2010

You should deduct TDS on monthly basis @ 10% and deposit the same with the govt authorities on or before 7th of the next month.

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CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors) (2195 Points)
Replied 16 January 2010

hi valli,

you have to deduct tax at the rate of 10%(provided it is a professional or technical service u/s194j). you have deduct on a monthly basis.

CA. Anshul Bajaj (Taxation Head) (173 Points)
Replied 16 January 2010

Consultants are to be covered u/s 194J...5000\Month that means ur Total yearly payment will exceed the specified Limit hence deduct TDS @ 10% Only!!

Warm Regards

Amit Aggarwal (Chartered Accountant) (40 Points)
Replied 16 January 2010

TDS will be deducted @ 10% and it will be deposited on or before 7th of next month.

If you are paying below 20000per annum to consultant then no need to deducted TDS during the financial year.

RADHIKA JALAN (agarwal) (1521 Points)
Replied 16 January 2010

fatema is right...........

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Jagdish Bhalia (Practicing CA) (453 Points)
Replied 16 January 2010

You are paying 5000 per month that the limit u/s 194J will be croosed (i.e Rs.20000 P.a). You have to deduct TDS @ 10% only.( No surcharges or education cess will be added.)

Parasar (Consultant) (25 Points)
Replied 16 April 2010

Dear All,

I have taken up a six month assignment with an organisation. I'll be serving them as full time consultant. compensation would be Rs.18,500/ month. Going by the rules 10% of it would be deducted. I wanted to know- Is there any way how I can save this 10%? Would rent receipt or some sort of investment help?

Awaiting Response.